This is my second time posting a question like this. This is my homework and I have only 2 more tries. I was wondering if someone could please example in detail how to solve it. 13. How shifts in demand and supply affect equilibriumConsider the market for pens. Suppose that the number of students with an allergy to pencil erasers increases, causing more students to switch frompencils to pens in school. Moreover, the price of ink, an important input in pen production, has increased considerably.On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens.Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to movecurve and it snaps backto its original position, just drag it a little farther,(?Scenario 110SupplyDemand87SupplyDemand112345678910QUANTITY (Millions of pens)Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1graph.PRICE (Dollars per pen) Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1graph.Scenario 210O9SupplyDemandO7SupplyDemand23568910QUANTITY (Millions of pens)Compare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them thatwasn't apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens.Use the results of your answers on both the Scenario 1 and Scenario 2 graphs to complete the following table. Begin by indicating the overall changein the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate theresulting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If youcannot determine the answer without knowing the magnitude of the shifts, choose Cannot determine.Change in Equilibrium ObjectsEquilibrium ObjectScenario 1Scenario 2When Shift Magnitudes Are UnknownPriceQuantityTrue or False: When both the demand and supply curves shift, the curve that shifts by the smaller magnitude determines the effect on theundetermined equilibrium object.O TrueO FalsePRICE (Dollars per pen)

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Consider the market for pens. Suppose that the number of students with an allergy to pencil erasers increases, causing more students to switch from pencils to pens in school. Moreover, the price of ink, an important input in pen production, has increased considerably.

Consider the market for pens. Suppose that the number of students with an allergy to pencil erasers increases, causing more students to switch from pencils to pens in school. Moreover, the price of ink, an important input in pen production, has increased considerably.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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