In preparing your writing, address the following questions:
1. What are the main characteristics of perfectly competitive markets? Do housing markets share these characteristics? (see Campbell, Giglio, and Pathak 2011).
2. Explain the determinants of supply and demand of real estate properties. Are real estate prices predictable? What are typical causes of bubbles on real estate markets?
3. What are the factors determining how long a property stays on the market? Address general market conditions as well as microeconomics factors affecting buyers’ and sellers’ decisions.
Demand and Supply of Rolls of Film - Assignment
The table below shows the demand and supply schedules for rolls of film.
Price Quantity demanded Quantity supplied
($ per roll) (rolls per week) (rolls per week)
2.00 3,000 1,000
3.00 2,500 1,500
4.00 2,000 2,000
5.00 1,500 2,500
6.00 1,000 3,000
a. Explain the concepts of demand, supply, and market equilibrium. What is the market equilibrium price for rolls of film? What is the equilibrium quantity?
b. If the price of film is $3 a roll, describe the situation in the film market. Is there shortage or surplus at this price? Explain how market equilibrium is restored.
c. A rise in income increases the quantity demanded by 1,000 rolls a week at each price. Draw a new table to account for this change in demand. What will be the new equilibrium price? Which quantity will be traded? Explain how the film market adjusts to its new equilibrium.
d. The number of film production lines increases, and at the same time, people switch to digital cameras. How do these events influence demand and supply? Do they create a shortage or a surplus at the equilibrium price in part a? Describe how the price and quantity change.
These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.Perfectly competitive markets are theoretical market structures where competition levels are at the highest possible levels, and this structure provides the best possible outcomes for consumers and society. For a market to deemed perfectly competitive, it needs to have several characteristics, i.e., all the firms in the market sell homogenous and identical products, all firms in the market are price takers and thus cannot influence changes in market prices, there is no influence of market share on price, buyers have full/perfect information about products in the market and the prices in the present, past, and future. Additionally, there are no barriers to entry or exit which means that firms can enter the market and exit at no cost, and resources such as labor are also homogeneous. Finally, in perfect markets, there are no externalities, the need for government regulation, and companies only make enough profits to continue running. If some companies made high profits, more firms would enter the market and thus lower the profits (Economicsonline.co.uk...
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