There is constantly a shift in supply and demand curves and markets are never at equilibrium. As a result, there is no purpose of the concept of equilibrium.” Do you agree/disagree with this statement.
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- “The laws of supply and demand indicate that higher prices are ineffective in reducing smoking. In particular, higher cigarette prices will reduce the demand for cigarettes. This reduction in demand will push the equilibrium price back down to its original level. Since the equilibrium price will remain unchanged, smokers will consume the same number of cigarettes.” Do you agree or disagree with this view?Describe how equilibrium is found. Describe how a shift of the demand or supply curve can effect equilibrium.What sort of shift in supply or demand would result in a market equilibrium with higher prices but lower sales volume? What might cause such a shift?
- Question 33 Consider the following series of shifts in Supply and Demand. Complete the following table, indicating in each of the 9 cells whether equilibrium price and equilibrium quantity go up, down, or stay the same. (Note: To reproduce the table for this question, you may make an exception to the usual 'no cutting and pasting' requirement for this test.) No Change in Supply An Increase in Supply A Decrease in Supply No Change in Demand An Increase in Demand A Decrease in DemandSuppose that in 2007 Ford sold 500,000 Mustangs at an average price of $18,800 per car; in 2008, 600,000 Mustangs were sold at an average price of $19,500 per car. From these statements what changes in supply or demand on the market for Mustangs produced such changes in equilibrium? (One graph. Start by plotting two points (price versus quantity, shift either supply or demand, not both) and then draw supply and demand graphs through them in a way that explains the change in the equilibrium from 2007 to 2008.Why would a shift in supply or demand happen as a result in a market equilibrium with higher prices but lower sales volume?
- Consider the market for baseball bats below (and assume it can be analyzed in our typical supply/demand framework). If the price of ash (the kind of wood used to make baseball bats) increases, the market equilibrium price of bats will increase and the equilibrium quantity will decrease. You should think about what this would look like on the graph above (i.e., with appropriate shift (or shifts)). Suppose an analyst for “Baseball World" argues that because the price of bats has risen, people will buy fewer units, and this will cause the equilibrium price to decrease again. This analyst is Group of answer choices a) correct because otherwise there would be a shortage in the market. b) incorrect because people buying fewer is a movement along the demand curve (not a leftward shift) in this case because buyers are reacting to the increase in price. c) correct because otherwise there would be a surplus in the market. d) incorrect because actually “people buying fewer” will…Hello, I only need the answer to the last question that is in BOLD. A market consists of groups of buyers and sellers of a good or service. Market equilibrium represents the price at which the quantity of goods supplied is balanced with the number of goods consumers are willing and able to buy. Consider the market for coffee: Assume first that there is a heatwave that damages a large portion of coffee beans. Describe how this would affect equilibrium in the market for coffee. Specifically, does demand or supply shift, in which direction, and what is the effect on equilibrium price and quantity? Next, assume there is a new study that finds enormous health benefits to coffee consumption. Again, describe how this would affect equilibrium in the market for coffee. Specifically, does demand or supply shift, in which direction, and what is the effect on equilibrium price and quantity? Now, extend your analysis to what might happen if both of these events (weather which damages coffee beans…Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, if the size of the shift of the demand curve is larger than the size of the shift of the supply curve, then the equilibrium quantity rises.” Is this correct or not? Why?
- How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is do price and quantity rise, fall, remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? Use supply and demand diagrams to verify your answers on the graph provided below. Label all axis including demand and supply. (See PPT slides #3-56, #3-58~#3-60, how to do it.) 15. a. Supply decreases and demand is constant. EI provide as an example for you to solve others. P S' Conclusion from D constant & SJ: S e2 Pe2- Price increases (P↑), and Quantity may decrease (QJ). e1 Pel Qe2 Qel b. Supply increases and demand decreases, simultaneously. E Now you provide D & S graphs. S Conclusion from DJ & S↑: Price (Р ), and Pe Quantity (Q_). e So (price, quantity) is indeterminate. Qe с. Demand increases and supply decreases, simultaneously. S Conclusion from D↑ & S]: Price (Р ), and Quantity (Q_). Pe e So…Supply and Demand — End of Chapter Problem Will Shakespeare is a struggling playwright in sixteenth-century London. As the price he receives for writing a play increases, he is willing to write more plays. Given the following situation, shift the demand and/or supply curve(s) and move the equilibrium point to its new position. Event: The bubonic plague, a deadly infectious disease, breaks out in London. Assume Will survives unscathed. Price of a play Market for Shakespeare's plays E Quantity of plays S DWhat is a relevant example of how a change in the market (including information, preferences, technology, price of alternative goods, regulations, taxes, etc.) has shifted either the supply or demand of a good. How did this change affect the market equilibrium for that good or service? Explain. Next, find a relatively recent news article (within the past year) to support your finding (the news search feature in Google is helpful with this). If you cannot find an article specific to your example, you may find an article about another similar good or service. Talk about the article and its findings, then include the URL.