Assume that each of the markets below is initially in equilibrium. Then for each market below, suppose that the indicated scenario occurs. Illustrate the effect of each event in a diagram and indicate the effects on the equilibrium price and quantity. a. Market: Hotels. Scenario: Airbnb provides a discount to customers due to the pandemic. b. Market: Mutton. Scenario: Doctors warn that consumption of mutton may lead to high cholesterol coupled with a decrease in the price of goat feed. c. Market: Motorcycles. Scenario: Consumers learn that cars will be much more heavily taxed starting with next year's models.
Assume that each of the markets below is initially in equilibrium. Then for each market below, suppose that the indicated scenario occurs. Illustrate the effect of each event in a diagram and indicate the effects on the equilibrium price and quantity. a. Market: Hotels. Scenario: Airbnb provides a discount to customers due to the pandemic. b. Market: Mutton. Scenario: Doctors warn that consumption of mutton may lead to high cholesterol coupled with a decrease in the price of goat feed. c. Market: Motorcycles. Scenario: Consumers learn that cars will be much more heavily taxed starting with next year's models.
Chapter1: Making Economics Decisions
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Transcribed Image Text:Assume that each of the markets below is initially in equilibrium. Then for each
market below, suppose that the indicated scenario occurs. Illustrate the effect of each
event in a diagram and indicate the effects on the equilibrium price and quantity.
a. Market: Hotels. Scenario: Airbnb provides a discount to customers due to the
pandemic.
b. Market: Mutton. Scenario: Doctors warn that consumption of mutton may
lead to high cholesterol coupled with a decrease in the price of goat feed.
c. Market: Motorcycles. Scenario: Consumers learn that cars will be much more
heavily taxed starting with next year's models.
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