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Chapter 3: Q.14 (page 78)

Will demand curves have the same exact shape in

all markets? If not, how will they differ?

Short Answer

Expert verified

Demand curves have different shapes depending upon the type of market.

Step by step solution

01

Step 1.Demand curves shapes vary from market to market.

For perfect competition, the market demand curve is a horizontal line that indicates prices are the same for every unit sold.

02

Step 2.monopoly firm 

The demand curve for a monopoly firm is the market demand curve(downward sloping) that shows, a firm can sell more output by lowering the price.

03

Step 3.monopolistic competition 

The demand curve shape for the monopolistic competition is downward sloping which shows, a monopolistic competitor, can gain more buyers by decreasing its price and without losing all of its buyers can increase the price of its goods

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Most popular questions from this chapter

Table 3.8 shows the information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands.

PriceQdQs
\(1205036
\)1504040
\(1803248
\)2102856
\(2402470

(a) What is the quantity demanded and quantity supplied at a price of \)120?

(b) At what price is the quantity supplied equal to 48,000?

(c) Graph the demand and supply curves for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from the table? What are the equilibrium price and the equilibrium quantity?

(d) If the price was $120, what would the quantities demanded and supplied be? Would a shortage or surplus exist? If so, how large would the shortage or surplus be?

Table 3.10 shows the supply and demand for movie tickets in a city. Graph demand and supply and identify the equilibrium. Then calculate in a table and graph the effect of the following two changes.

(a) Three new nightclubs open. They offer decent bands and have no cover charge, but make their money by selling food and drink. As a result, demand for movie tickets falls by six units at every price.

(b) The city eliminates a tax that it placed on all local entertainment businesses. The result is that the quantity supplied of movies at any given price increases by 10%.

Price per poundQdQs
\(5.002616
\)6.002418
\(7.002220
\)8.002121
$9.002022

If a price floor benefits producers, why does a price floor reduce social surplus?

What is total surplus? How is it illustrated on a

demand and supply diagram?

Will supply curves have the same shape in all

markets? If not, how will they differ?
See all solutions

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