Use the following information to answer the next 3 questions. Widgets and Sprockets are substi- tutes. Suppose that Widgets have become more costly to produce. 8. What effect will the increase in the cost of producing Widgets have in the market for Widgets? (a) The equilibrium price of widgets rises and the equilibrium quantity falls. (b) The equilibrium price of widgets falls and the equilibrium quantity rises. (c) The equilibrium price and quantity of widgets falls. (d) The equilibrium price and quantity of widgets rises.

word_media_image1.jpeg

answer

watching

201

views

For unlimited access to Homework Help, a Homework+ subscription is required.

You have 0 free answers left.
Get unlimited access to 3.8 million step-by-step answers.

Get unlimited access

Already have an account? Log in

Jamar FerryLv2

5 Aug 2018

Unlock all answers

Get 1 free homework help answer.

Already have an account? Log in

Related questions

Widgets R Us, which is a price-taking firm, is currently producing 250 units of output. The market price is $3 per unit, the marginal cost of the 250th unit is $2.75, the average total cost is $3.50 per unit, and the average variable cost is $2.50 per unit. What advice should you give Widgets R Us?

Choose one answer.

a. Continue to produce 250 units in the short run.

b. Shut down to minimize losses.

c. Decrease output to 200 units.

d. Increase output to reduce losses.

apricotraccoon530

Suppose the market for widgets can be described by the following equations

Demand: P = 10 – Q

Supply: P = Q – 4

Where P is the price in $ per unit and Q is the quantity in thousands of units. Then

a. What are the equilibrium price and quantity?

b. Suppose the government imposes a tax of $1 per unit to reduce widget consumption and raise government revenues. What will the new equilibrium quantity be? What price will the buyer pay? What amount per unit will the seller receive? What will be the total government revenue?

c. The tax is removed and a subsidy of $1 per unit granted to widget producers. What will the equilibrium quantity be? What price will the buyer pay? What amount per unit will the seller receive? What will be the total cost to the government?

browncrab248

WidgetsRUs is deciding on a widget production schedule for the next three days. They currently have 0 widgets in inventory and they are looking to satisfy a demand of 100 widgets at the end of day 3. Worker 1 is scheduled to work on days 1 and 2 and Worker 2 is scheduled to work on days 2 and 3. Each worker produces 3 widgets an hour and is allowed to work at most 14 hours on a single day and at most 24 hours over the three day production period. Further, the total labor (hours worked by both workers) on any day cannot exceed 20 hours. On day 1 the workers are paid $10 an hour, on day 2 they are paid $8 an hour, and on day 3 the workers are paid $7 an hour.

Find a labor schedule for both workers which minimizes labor costs while still meeting the 100 units of demand at the end of day 3. Formulate the problem as a linear program. Solve the problem in excel and use the sensitivity report to answer the following questions which you may assume are all independent. You receive a request for an extra 2 widgets at a price of $3 per widget (assume the additional profit from this sale would be $6).

Should you increase production to 102 widgets?

How much does the hourly wage on day 1 need to decrease in order to start producing on day 1 in the optimal solution?