19) If price rises, what happens to quantity supplied for a product? a. It incre

Question

19) If price rises, what happens to quantity supplied for a product? a. It increases. b. It decreases. c. It does not change. d. Quantity supplied is constant, but supply increases. 20) The mechanism of supply and demand is a. a fundamental tool in both microeconomics and macroeconomics. b. the only real "law" of economics. c. a fundamental tool only in microeconomics. d. a fundamental tool only in macrocconomics. 21) A shift in the supply curve of bicycles resulting from higher steel prices will lead to a. higher prices of bicycles. b. lower prices of bicycles. c. a shift in the demand curve for bicycles. d. larger output of bicycles. e no change in the price of bicycles Suppose Bean's Backpacks have the following supply and demand functions: Q 200-3P Qs 25+2P 22) What is the equilibrium price for Bean's Backpacks? 23) What is the equilibrium quantity for Bean's Backpacks?

Explanation / Answer

19 a) It increases.
As now the price increases supplier finds it more profitable to produce that product so, the qunatity supplied also increases.
20 a) a fundamental tool of both macro and micro economics
As we all know supply and demand are the tools of macroeconomics and microeconomics also. It plays equal character in both the economics part.
21 c) a shift in demand curve for bicycles.
The shift in supply curve for bicycle means changing in other factor keeping price constant. So, if the price of steel used in bicycles increases it will shift the demand curve.
22 Qd=Qs
200-3P=25+2P
200-25=2P+3P
175=5P
P=175/5
P=35, ANS.

23 Qd=200-3P , P=35
=200-3*35
=200-105
=95
Qs=25+2P
=25+2*35
=25+70
=95

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