Q 38650 42p4: Assume That All Factors Affecting Demand In

Q 38650 42p4 Assume That All The Factors Affecting Demand In

Q = 38,P 4. Assume that all the factors affecting demand in this model remain the same, but that the price has changed. Further assume that the price changes are 100, 200, 300, 400, 500, 600 cents. 5. Plot the demand curve for the firm. 6. Plot the corresponding supply curve on the same graph using the following MC / supply function Q = -7909.89 + 79.1P with the same prices.

Paper For Above instruction

Understanding the relationship between demand and supply is fundamental in economic analysis, as it explains how prices are determined and how market equilibrium is established. This paper explores the dynamics of demand and supply for a specific firm, using given data and functions to illustrate their interaction. We analyze how varying prices influence demand and supply, construct the respective curves, and interpret the market equilibrium points.

Initially, the demand function for the firm is considered to be constant in all other factors except for the price, which is varied across a specified range. The prices are given in cents as 100, 200, 300, 400, 500, and 600. The precise demand function was not explicitly specified, but based on common economic modeling practices, it is reasonable to assume a linear demand curve and to approximate demand at each price point based on relevant data or assumptions. For the purpose of this analysis, suppose the demand increases as the price decreases, consistent with the law of demand, yet the specific demand quantities are not provided; thus, the demand curve's general trend will be discussed.

Concurrently, the supply curve is modeled through the marginal cost (MC) or supply function Q = -7909.89 + 79.1P, where Q denotes quantity demanded or supplied, and P is the price in cents. This function exhibits a positive relationship between price and quantity supplied, as expected. By plugging in the given prices, we can calculate the corresponding quantity supplied at each price point, thereby plotting the supply curve.

To visualize these relationships, a graph is constructed with price on the horizontal (x) axis and quantity on the vertical (y) axis. The demand curve is typically downward sloping, indicating higher quantities demanded at lower prices, while the supply curve is upward sloping. When both are plotted, their intersection determines the market equilibrium.

Calculating the supply quantities at each specified price:

  • At P = 100 cents: Q = -7909.89 + 79.1(100) = -7909.89 + 7910 = 0.11
  • At P = 200 cents: Q = -7909.89 + 79.1(200) = -7909.89 + 15820 = 7910.11
  • At P = 300 cents: Q = -7909.89 + 79.1(300) = -7909.89 + 23730 = 15820.11
  • At P = 400 cents: Q = -7909.89 + 79.1(400) = -7909.89 + 31640 = 23730.11
  • At P = 500 cents: Q = -7909.89 + 79.1(500) = -7909.89 + 39550 = 31640.11
  • At P = 600 cents: Q = -7909.89 + 79.1(600) = -7909.89 + 47460 = 39550.11

On the demand side, assuming a typical demand response, the demand will decrease as price increases, reflecting consumers’ sensitivity to price changes. An illustrative demand curve can be approximated where demand quantity decreases with increasing price, or simply added to the specific points where demand data exists or can be estimated.

Plotting the demand and supply curves on the same graph highlights their intersection point, which signifies the equilibrium price and quantity where market supply equals demand. This point varies depending on the precise demand function, but the supply curve calculation provides a baseline for comparison.

The intersection or equilibrium can be mathematically derived or visually estimated. For example, when the supply quantity at a specific price exceeds the demand, there is a surplus; conversely, if demand exceeds supply, a shortage exists. These market imperfections tend to push prices toward equilibrium.

In conclusion, understanding the formation of demand and supply curves involves analyzing how individual factors such as price influence overall market behavior. The given supply function allows explicit calculation of quantities at set prices, providing insight into the market's functioning. While the demand data was not explicitly provided, the conceptual framework remains valid: plotting both curves and analyzing their intersection offers critical insights into market equilibrium, price determination, and resource allocation.

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