2. Assume that the equilibrium price is at $3 and equilibrium quantity is at 40 units of a product. Then, imagine that suddenly any of determinants of demand, other than price of the product, caused demand to decrease while at the same time one of the determinants of supply, other than the price of the product, caused supply to increase. TASK: First, draw the demand and supply graph to show the original equilibrium price at $3 and equilibrium quantity at 40 units. Second pick ONE different DETERMINANT of DEMAND and ONE different DETERMINANT of SUPPLY Third, show in the graph what it looked like if demand decreased and supply increased (select where you think that the new price and quantity would change to), what the new equilibrium price and equilibrium quantity would be, after both changes in demand and supply occurred. Fourth, in a couple of words, write down what would be that YOUR new equilibrium price and equilibrium quantity. [That is, tell us that the original equilibrium price increased or decreased to which specific new equilibrium price, after the changes occurred; also tell us that the original equilibrium quantity increased or decreased to which specific new equilibrium quantity, after the changes occurred]
2. Assume that the equilibrium price is at $3 and equilibrium quantity is at 40 units of a product. Then, imagine that suddenly any of determinants of demand, other than price of the product, caused demand to decrease while at the same time one of the determinants of supply, other than the price of the product, caused supply to increase. TASK: First, draw the demand and supply graph to show the original equilibrium price at $3 and equilibrium quantity at 40 units. Second pick ONE different DETERMINANT of DEMAND and ONE different DETERMINANT of SUPPLY Third, show in the graph what it looked like if demand decreased and supply increased (select where you think that the new price and quantity would change to), what the new equilibrium price and equilibrium quantity would be, after both changes in demand and supply occurred. Fourth, in a couple of words, write down what would be that YOUR new equilibrium price and equilibrium quantity. [That is, tell us that the original equilibrium price increased or decreased to which specific new equilibrium price, after the changes occurred; also tell us that the original equilibrium quantity increased or decreased to which specific new equilibrium quantity, after the changes occurred]
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![2. Assume that the equilibrium price is at $3 and equilibrium
quantity is at 40 units of a product. Then, imagine that
suddenly any of determinants of demand, other than price
of the product, caused demand to decrease while at the
same time one of the determinants of supply, other than the
price of the product, caused supply to increase.
TASK:
First, draw the demand and supply graph to show the
original equilibrium price at $3 and equilibrium quantity at
40 units.
Second pick ONE different DETERMINANT of
DEMAND and ONE different DETERMINANT of
SUPPLY
Third, show in the graph what it looked like if demand
decreased and supply increased (select where you think that
the new price and quantity would change to), what the new
equilibrium price and equilibrium quantity would be, after
both changes in demand and supply occurred.
Fourth, in a couple of words, write down what would be
that YOUR new equilibrium price and equilibrium quantity.
[That is, tell us that the original equilibrium price increased
or decreased to which specific new equilibrium price, after
the changes occurred; also tell us that the original
equilibrium quantity increased or decreased to which
specific new equilibrium quantity, after the changes
occurred]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fce424087-5956-4692-98a5-7a116d4d0dd9%2F877f3d7d-197a-46bb-a4f8-e1e09e6fdfe1%2Fs2vhjkq.jpeg&w=3840&q=75)
Transcribed Image Text:2. Assume that the equilibrium price is at $3 and equilibrium
quantity is at 40 units of a product. Then, imagine that
suddenly any of determinants of demand, other than price
of the product, caused demand to decrease while at the
same time one of the determinants of supply, other than the
price of the product, caused supply to increase.
TASK:
First, draw the demand and supply graph to show the
original equilibrium price at $3 and equilibrium quantity at
40 units.
Second pick ONE different DETERMINANT of
DEMAND and ONE different DETERMINANT of
SUPPLY
Third, show in the graph what it looked like if demand
decreased and supply increased (select where you think that
the new price and quantity would change to), what the new
equilibrium price and equilibrium quantity would be, after
both changes in demand and supply occurred.
Fourth, in a couple of words, write down what would be
that YOUR new equilibrium price and equilibrium quantity.
[That is, tell us that the original equilibrium price increased
or decreased to which specific new equilibrium price, after
the changes occurred; also tell us that the original
equilibrium quantity increased or decreased to which
specific new equilibrium quantity, after the changes
occurred]
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