Suppose the Market Demand Curve for Apples Can Be Expressed

question 82

Multiple Choice

Suppose the market demand curve for apples can be expressed as Q^D = 220 - 2P - Pb + 0.2Y,where Q^D is the quantity of apples demanded,P is the price of an apple,Pb is the price of a banana,and Y is the average annual household income in thousands of dollars.What is the change in the quantity demanded of apples if the income increases by $10,000?

• A) 220 apples
• B) 2 apples
• C) 40 apples
• D) Not enough information to answer the question.

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Definitions:

Economic Loss

A situation where total costs exceed total revenues, resulting in a negative profit for a business.

Short-run Supply Curve

Shows the relationship between the price of a good and the quantity supplied over a short period, when at least one input is fixed.

Minimum Point

The point at which a function reaches its smallest value, often used in the context of costs or optimization problems.

Short Run

A period of time during which at least one input of production is fixed, affecting the firm's ability to adjust production levels.