Answer in Microeconomics for Nitin #174756

During the Covid-19 pandemic, the Ayurvedic medicines have an inelastic demand and 

electronic devices have an elastic demand. Imagine that technological advancement 

doubles the supply of both products (i.e. quantity supplied at each price is twice as it was 

earlier)

i. What will be the equilibrium price and quantity in each market?

ii. Which product experiences a larger change in price and which product experiences

larger change in quantity. (9)

b. Do you agree with this statement, MC curve crosses the ATC curve at its minimum?

Why? (4)

c. How does an increase in interest rate affects household savings? Explain with the help of 

an example with graph

The equilibrium in a market occurs where the quantity supplied in that market is equal to the quantity demanded in that market. Therefore, we can find the equilibrium by setting supply and demand equal and then solving for P.

i.                    What will be the equilibrium price and quantity in each market?

Equilibrium price =          quantity supplied equals quantity demanded

Therefore the equilibrium price will be equal in both markets.

ii.                  Which product experiences a larger change in price and which product experiences larger change in quantity?

The product that experiences a larger change in price is medicine, while the product that will experience a larger change in quantity are electronic devices..

b. Do you agree with this statement, MC curve crosses the ATC curve at its minimum? Yes. I agree with the statement.

Why? Because the Marginal cost (MC) is the extra cost incurred when one extra unit of output is produced. Average product (AC) is the total cost per unit of output. When the MC is smaller the AC, the AC decreases. This is because when the extra unit of output is cheaper than the average cost then the AC is pulled down. Similarly, when the MC is greater than the AC, the AC is pulled up. The point of intersection between the MC and AC curves is also the minimum of the AC curve. This can be explained by the fact that when the cost of the marginal output is equal to the average cost of the output, then the AC neither falls nor rises.

c. How does an increase in interest rates affect household savings? Explain with the help of an example with graph

Interest rates determine the amount of interest payments that savers will receive on their deposits. An increase in interest rates will make saving more attractive and should encourage saving. A cut in interest rates will reduce the rewards of saving and will tend to discourage saving

 

 

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with TheBestPaperWriters
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Psychology
Thanks a lot the paper was excellent
Customer 452453, October 26th, 2022
Public Administration
Excellent timely work
Customer 452451, April 19th, 2023
Anthropology
excellent loved the services
Customer 452443, September 23rd, 2022
Business Studies
Thank you!
Customer 452451, November 27th, 2022
English 101
Very good job. I actually got an A
Customer 452443, September 25th, 2022
Business Studies
Excellent service - thank you!
Customer 452469, February 20th, 2023
Theology
Job well done and completed in a timely fashioned!
Customer 452451, November 18th, 2022
Anthropology
Excellent services will definitely come back
Customer 452441, September 23rd, 2022
Business Studies
Job well done. Finish paper faster than expected. Thank you!
Customer 452451, October 3rd, 2022
Architecture, Building and Planning
The assignment was well written and the paper was delivered on time. I really enjoyed your services.
Customer 452441, September 23rd, 2022
Nursing
The paper was EXCELLENT. Thank you
Customer 452449, September 23rd, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat