Based on your experience gained in the previous questions, try to answer this one. There is more than one correct answer to this question. Suppose that we observe the equilibrium price of corn to have increased from one year to the next. What could be a possible reason for this? Which of the following statements are plausible explanations for this observation? (Assume that the demand and supply curves have regular shapes: Demand is downward sloping and supply is upward sloping; like the ones in the previous questions). There is more than one correct answer. If the equilibrium quantity has also increased, we can say for sure that demand has increased. Without an increase in demand, it is impossible to observe an increase in both P and Q. If the equilibrium quantity has also increased, we can say for sure that supply has increased. Without an increase in supply, it is impossible to observe an increase in both P and Q. If the equilibrium quantity has decreased, we can say for sure that supply has decreased. Without a reduction in supply, it is impossible to observe an increase in P and a reduction in Q. If the equilibrium quantity has decreased, we can say for sure that supply has increased. Without an increase in supply, it is impossible to observe an increase in P and a reduction in Q. If the equilibrium quantity has remained the same, then supply must have increased and demand must have decreased. If the equilibrium quantity has remained the same, then supply must have decreased and demand must have increased.
Based on your experience gained in the previous questions, try to answer this one. There is more than one correct answer to this question. Suppose that we observe the equilibrium price of corn to have increased from one year to the next. What could be a possible reason for this? Which of the following statements are plausible explanations for this observation? (Assume that the demand and supply curves have regular shapes: Demand is downward sloping and supply is upward sloping; like the ones in the previous questions). There is more than one correct answer. If the equilibrium quantity has also increased, we can say for sure that demand has increased. Without an increase in demand, it is impossible to observe an increase in both P and Q. If the equilibrium quantity has also increased, we can say for sure that supply has increased. Without an increase in supply, it is impossible to observe an increase in both P and Q. If the equilibrium quantity has decreased, we can say for sure that supply has decreased. Without a reduction in supply, it is impossible to observe an increase in P and a reduction in Q. If the equilibrium quantity has decreased, we can say for sure that supply has increased. Without an increase in supply, it is impossible to observe an increase in P and a reduction in Q. If the equilibrium quantity has remained the same, then supply must have increased and demand must have decreased. If the equilibrium quantity has remained the same, then supply must have decreased and demand must have increased.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Based on your experience gained in the previous questions, try to answer this one. There is
more than one correct answer to this question. Suppose that we observe the equilibrium
price of corn to have increased from one year to the next. What could be a possible reason
for this? Which of the following statements are plausible explanations for this observation?
(Assume that the demand and supply curves have regular shapes: Demand is downward
sloping and supply is upward sloping; like the ones in the previous questions).
There is more than one correct answer.
If the equilibrium quantity has also increased, we can say for sure that demand has increased.
Without an increase in demand, it is impossible to observe an increase in both P and Q.
If the equilibrium quantity has also increased, we can say for sure that supply has increased. Without
an increase in supply, it is impossible to observe an increase in both P and Q.
If the equilibrium quantity has decreased, we can say for sure that supply has decreased. Without a
reduction in supply, it is impossible to observe an increase in P and a reduction in Q.
If the equilibrium quantity has decreased, we can say for sure that supply has increased. Without an
increase in supply, it is impossible to observe an increase in P and a reduction in Q.
If the equilibrium quantity has remained the same, then supply must have increased and demand
must have decreased.
If the equilibrium quantity has remained the same, then supply must have decreased and demand
must have increased.
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