Consider the following supply-and-demand diagrams depicting the markets for X and Y, respectively. In the market for good X, supply is perfectly elastic, indicating that producers are prepared to supply any amount of X at price Po DE So P₁ ****** D₁ Do wir vie Po Quantity of X ▼ S0, S₁ a. In the market for X, demand increases from Do to D₁. As a result, the total value that consumers place on X increases 1' Quantity of Y Do G HIVI VM555 b. The increase in demand for X does not change marginal value that consumers place on X. c. In the market for Y, a technological improvement causes supply to increase from So to S₁, causing price to fall from po to p₁. The total vali a given quantity of Y consumed is unchanged. d. The marginal value of Y OA. is unchanged since demand did not shift. OB. is unchanged even though the price fell, since there has been no change in their preferences regarding Y. OC. falls because the price fell, even though there has been no change in their preferences regarding Y. O D. falls since the price fell, indicating a change in their preferences regarding Y.

Consider the following supply-and-demand diagrams depicting the markets for X and Y, respectively. In the market for good X, supply is perfectly elastic, indicating that producers are prepared to supply any amount of X at price Po DE So P₁ ****** D₁ Do wir vie Po Quantity of X ▼ S0, S₁ a. In the market for X, demand increases from Do to D₁. As a result, the total value that consumers place on X increases 1' Quantity of Y Do G HIVI VM555 b. The increase in demand for X does not change marginal value that consumers place on X. c. In the market for Y, a technological improvement causes supply to increase from So to S₁, causing price to fall from po to p₁. The total vali a given quantity of Y consumed is unchanged. d. The marginal value of Y OA. is unchanged since demand did not shift. OB. is unchanged even though the price fell, since there has been no change in their preferences regarding Y. OC. falls because the price fell, even though there has been no change in their preferences regarding Y. O D. falls since the price fell, indicating a change in their preferences regarding Y.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 6PA: The price of coffee rose sharply last month, while the quantity sold remained the same. Five people...

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