ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 4, Problem 6.14P
To determine
Effect on the
Concept Introduction:
Equilibrium refers to a situation where the quantity demanded of the good equals the quantity supplied of thee good. It means the market clears.
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Suppose we are analyzing the market for pizza as shown
on the graph below. Answer the following questions:-
Price
$40
35
30
25
20
15
10
100 200 300 400 500 600 700 800
Quantity
Suppose the cost of production (input prices)
increase in the market. What do you expect to happen to
the market? Explain briefly. (2 marks)
е.
Is
PRICE (Dollars per pound)
North
South
APPLES (Thousands of pounds per year)
(?)
In the North, if the price goes up by $0.20 per pound, then the quantity supplied in the North goes up by 100 pounds per year. If the price of apples
goes up by $0.20 in the South, what will happen to the quantity supplied?
The quantity will increase by 100 pounds per year.
The quantity will increase by 50 pounds per year.
There is not enough information given to determine the supply change in the South.
The quantity will decrease by 100 pounds per year.
(Demand Shifters) List five things that are held constantalong a market demand curve, and identify the change ineach that would shift that demand curve to the right—that is, that would increase demand.
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