Assume gadgets are sold in a competitive market, the equilibrium price is $6, and the equilibrium quantity is 500 units.(a) Using the numerical values above, draw a correctly labeled graph of the market for gadgets and show each of the following.(i) The equilibrium price(ii) The equilibrium quantity(b) At a price of $8 per unit, will there be a surplus or a shortage in the market? Explain.(c) Assume gadgets now become more popular. On your graph in part (a), show the effect of the increase in gadgets' popularity on the equilibrium price and quantity of gadgets.(d) Assume instead there is an increase in the price of tin, a major input in producing gadgets. What will be the effect of an increase in the price of tin on the market for gadgets?(e) If both changes in part (c) and part (d) occurred simultaneously, will the equilibrium quantity of gadgets increase, decrease, remain unchanged, or be indeterminate? Explain. 1) Include correctly labeled diagrams, if useful or required, in explaining your answers. Acorrectly labeled diagram must have all axes and curves clearly labeled and must showdirectional changes. If the question prompts you to "Calculate," you must show how youarrived at your final answer.Assume gadgets are sold in a competitive market, the equilibrium price is $6, and theequilibrium quantity is 500 units.(a) Using the numerical values above, draw a correctly labeled graph of the market forgadgets and show each of the following.(i) The equilibrium price(ii) The equilibrium quantity(b) At a price of $8 per unit, will there be a surplus or a shortage in the market? Explain.(c) Assume gadgets now become more popular. On your graph in part (a), show the effect ofthe increase in gadgets' popularity on the equilibrium price and quantity of gadgets.(d) Assume instead there is an increase in the price of tin, a major input in producinggadgets. What will be the effect of an increase in the price of tin on the market for gadgets?(e) If both changes in part (c) and part (d) occurred simultaneously, will the equilibriumquantity of gadgets increase, decrease, remain unchanged, or be indeterminate? Explain.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume gadgets are sold in a competitive market, the equilibrium price is $6, and the equilibrium quantity is 500 units.
(a) Using the numerical values above, draw a correctly labeled graph of the market for gadgets and show each of the following.
(i) The equilibrium price
(ii) The equilibrium quantity
(b) At a price of $8 per unit, will there be a surplus or a shortage in the market? Explain.
(c) Assume gadgets now become more popular. On your graph in part (a), show the effect of the increase in gadgets' popularity on the equilibrium price and quantity of gadgets.
(d) Assume instead there is an increase in the price of tin, a major input in producing gadgets. What will be the effect of an increase in the price of tin on the market for gadgets?
(e) If both changes in part (c) and part (d) occurred simultaneously, will the equilibrium quantity of gadgets increase, decrease, remain unchanged, or be indeterminate? Explain.

1) Include correctly labeled diagrams, if useful or required, in explaining your answers. A
correctly labeled diagram must have all axes and curves clearly labeled and must show
directional changes. If the question prompts you to "Calculate," you must show how you
arrived at your final answer.
Assume gadgets are sold in a competitive market, the equilibrium price is $6, and the
equilibrium quantity is 500 units.
(a) Using the numerical values above, draw a correctly labeled graph of the market for
gadgets and show each of the following.
(i) The equilibrium price
(ii) The equilibrium quantity
(b) At a price of $8 per unit, will there be a surplus or a shortage in the market? Explain.
(c) Assume gadgets now become more popular. On your graph in part (a), show the effect of
the increase in gadgets' popularity on the equilibrium price and quantity of gadgets.
(d) Assume instead there is an increase in the price of tin, a major input in producing
gadgets. What will be the effect of an increase in the price of tin on the market for gadgets?
(e) If both changes in part (c) and part (d) occurred simultaneously, will the equilibrium
quantity of gadgets increase, decrease, remain unchanged, or be indeterminate? Explain.

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