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
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answer #1
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answered by Titan 4
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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
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answer #2
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answered by Lee W. 5
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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
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answer #3
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answered by roynburton 5
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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
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answer #4
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answered by you will lose till 5kg most h2o 2
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2016-09-28 07:33:12
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answer #5
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answered by kelchner 4
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