English Deutsch Français Italiano Español Português 繁體中文 Bahasa Indonesia Tiếng Việt ภาษาไทย
All categories

Does anyone know this stuff? We were given a bunch of questions, but this is the one that has me stumped. I'd really appreciate the help.

Indicate what happens to equilibrium price and equilibrium quantity for each of the following:

Supply increases and demand is constant.
Demand decreases and supply is constant.
Supply decreases and demand is constant.
Supply increases and demand increases
Demand decreases and supply increases.

2007-02-01 14:49:11 · 5 answers · asked by metsfan6986 1 in Social Science Economics

5 answers

First a tip so that you can solve any variations of this type of questions.
draw the demand and supply curves. increrase is a rightward shift of the curve and decrease if a leftward shift of the curve. you can proceed according to the case.
Answers:
1) price falls, quantity increases
2) price falls, quantity decreases
3) price rises, quantity falls
4) price unchanged, quantity increases
5) price falls, quantity same

in cases 4 and 5 the answer applies if the proportion is the same.
otherwise it depends on the proportion.

2007-02-01 21:55:52 · answer #1 · answered by Titan 4 · 0 0

Supply increases and demand is constant.

EP decreases, EQ decreases - when supply increases and demand is constant the price goes down (basic supply and demand theory).

Demand decreases and supply is constant. - EP decreases, EQ decreases

Supply decreases and demand is constant. - EP increases, EQ decreases

Supply increases and demand increases - insufficient information to determine price or quantity effect (if the increases are inversely proportional the effect would be no change).

Demand decreases and supply increases. - EP decreases, insufficient info for EQ

To solve these types of questions, draw a graph with the y-axis being price and the x-axis being quantity. Then draw a demand line from upper left to lower right and a supply line from lower left to upper right. Note the intersection is th equilibrium point. Then draw a new demand or supply line based on the question. For example, if supply increases and demand stays constant - draw a line to the right of the current supply line. Note that the new intersection is at a point where price is lower, but quantity increases. Now do this for the rest (sometimes you'll need two new lines)

2007-02-01 15:06:51 · answer #2 · answered by Lee W. 5 · 0 0

Equilibrium Price = EP
Equilibrium Quantity = EQ

1) Supply increases and demand is constant.

EP stays constant and EQ rises.

2) Demand decreases and supply is constant.

EP and EQ both fall.

3) Supply decreases and demand is constant.

EP stays constant and EQ falls.

4) Supply increases and demand increases

EP may fall, stay constant or rise depending on the magnitude of the changes in each factor and their initial values. EQ rises in all cases.

5) Demand decreases and supply increases

EP falls in all cases. EQ may fall, stay constant or rise depending on the magnitude of the changes in each factor and their initial values.

2007-02-01 14:52:47 · answer #3 · answered by roynburton 5 · 0 0

nr.1 price is falling quantity rising
nr.2 price is falling quantity rising
nr.3 price is falling quantity rising
nr.4 status quo
nr.5 price is falling quantity rising

2007-02-01 15:09:06 · answer #4 · answered by you will lose till 5kg most h2o 2 · 0 0

once you're called to earnings movie, learn movie. yet, do a solid internship so which you will hit upon a job once you graduate. additionally, that's a benefit to do it in a super city, so learn at UCLA, or USC, NYU, or CUNY, and so on. so which you will build the connections interior the marketplace you will might desire to discover gainful employment after commencement. that's my organisation concept which you will possibly desire to significant in a job that would desire to make you satisfied, and in case you does not be satisfied working in an Economics interest after college, no remember how difficulty-free it is going to likely be to discover a job after commencement, you heavily isn't delighted alongside with your artwork. Get your BA in movie, and whether you do not hit upon a job in movie after commencement, you are able to enter the enterprise worldwide, learn for an MBA (even in Economics, in case you utilize your electives in undergrad for Economics classes, or get an Economics minor) and finally end up the place you're able to have in case you had given up your targets on the age of 18. different than, you will need had 4 years of interpreting, working and attempting to make it on your dream interest. the worldwide takes all kinds of folk to flow. playstation . maximum individuals with their BA in movie are actually not unemployed... nevertheless maximum are not working interior the movie enterprise anymore. Many flow lower back to college for JDs (regulation college), or MBAs, and finally end up earning 6 figures besides. A Bachelor's degree is a solid element to earn, in spite of the main.

2016-09-28 07:33:12 · answer #5 · answered by kelchner 4 · 0 0

fedest.com, questions and answers