Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Macroeconomics Expert

Suppose the demand curve for a consumer for coffee is:

Q = 6 – 2P,

Where Q represents the number of cups per day and P is the price of coffee per cup. 

problem1. Assume the consumer is on coffee shop 1. Coffee shop 1 charges $2.00 per cup. 

- Draw and label demand curve for a cup of coffee for the consumer (please don’t forget to specify the intercept of demand curve for all of the axes).

- How many cups would she drinks a day and how much would she spend a day on coffee shop 1?  Elucidate your answer and demonstrate it on graph.

Hint: I would draw the incremental price of drinking a cup of coffee on the shop to show the number of cups the consumer selects.

- What are the consumer surplus and the average price per cup?

problem2. Assume the consumer is on coffee shop 2. Coffee shop 2 provides unlimited cups of coffee for the price of $9.00 per day.

- How many cups would she drinks a day and how much would she spend a day on coffee shop 2?  Elucidate your answer and demonstrate it on the graph.

Hint: Again, I would draw the demand curve and the incremental price of drinking a cup of coffee on the shop to show the number of cups consumer selects.

- What are the consumer surplus and the average price per cup?

problem3. Assume the consumer can choose either coffee shop 1 or coffee shop 2, but not both.

- Assuming that other things (like location, quality of coffee, and so forth) are the same, which coffee shop would the customer desire? Will the difference in average price per cup affect your choice between coffee shop 1 and 2? Elucidate your answer.   

- How, if at all, would your answer above change if coffee shop 2 provides unlimited cups of coffee for the price of $7.00 per day? Elucidate your answer.

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M9860

Have any Question? 


Related Questions in Macroeconomics

Assignmentread reading material and go to to

Assignment Read Reading material and go to to https://www.cia.gov/library/publications/the-world-factbook to research and select a country for international expansion of business operations. Prepare a Word document of th ...

What is the payoff for a put option with a strike price of

What is the payoff for a put option with a strike price of $50 if the stock price at expiration is $65? Please provide detail of how you got your answer

Assignmentprimary task response within the discussion board

Assignment Primary Task Response: Within the Discussion Board area, write 400-600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions ...

How would the assumption of perfect information in the

How would the assumption of perfect information in the theory of perfect competition render advertising utterly ineffective?

The stock market is like a casino and buying stock is just

The stock market is like a casino and buying stock is just like placing a bet. Stocks are risky but with good research and prudent planning one can earn significant returns. Pick a statement and defend it.

What happens to interest rate and price level when

What happens to interest rate and price level when investment spending increase?

A competitive firm in a perfectly competitive market

A competitive firm in a perfectly competitive market produces and sells hats. Last year, it produced and sold 1,000 hats at the equilibrium price of $10. It incurred average variable costs of $6 and earned total economic ...

Using the following Using the following link: 

Using the following link:  http://www.econedlink.org/national-budget-simulator.php , work through the National Budget Simulation (Links to an external site.) in an effort to achieve a budget deficit of $1100B dollars. Sc ...

1 we have read about medical etiquette standards and ethics

1. We have read about medical etiquette standards and ethics. What is the difference between medical etiquette and ethics? Provide examples and explain why it is necessary to understand this distinction. 2. Describe the ...

Consider the following bayesian game player 1 can be of two

Consider the following Bayesian game: player 1 can be of two types (determined by "Nature") -Reliable (R) with probability "x" or Unreliable (U) with probability "1-x". These probabilities areknown to both players. Playe ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro