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Chapter 3: Q. 3.15 (page 73)

In Fig 3-2, what are the effects of a price decrease from \(4 per portable power bank to \)2 per portable power bank on the quantities of portable power banks demanded by buyer 1 and by buyer 2 individually and combined?

Short Answer

Expert verified

1- 40

2- 50

combined- 90

Step by step solution

01

Step1. Introduction

Demand schedule or the demand function is the representation of individual as well as combined demand for portable power bank.

Law of demand establishes an inverse relationship between prices and the quantity demanded.

02

Step2. Explanation 

As price falls to $2 from $4, buyers will demand higher quantity of goods. Buyer one shall demand 40 power banks and Buyer two shall demand 50 power banks.

The combined demand at $2 is 90 units.

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Most popular questions from this chapter

Consider the market for smartphones. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. Illustrate each, and show what would happen to the equilibrium quantity and the market price.

a. The price of touch screens used in smartphones declines.

b. The price of machinery used to produce smartphones increases.

c. The number of manufacturers of smartphones increases.

d. There is a decrease in the market demand for smartphones.

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What do you predict has happened to oil storage prices

whenever shortages of storage space have arisen?

Discuss the difference between money prices and relative prices

In the market for portable power banks(a normal good), explain whether the following events would cause an increase or a decrease in demand or an increase or decrease in the quantity demanded. Also, explain what happens to the equilibrium quantity and the market-clearing price.

a. There is an increase in the price of carry cases for portable power banks.

b. There is a decrease in the price of devices used to charge portable power banks.

c. There is an increase in the number of consumers of portable power banks.

d. A booming economy increases the income of the typical buyer of portable power banks.

e. Consumers of portable power banks anticipate that the price of this good will decline in the future.
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