**Economic Analysis of Supply and Demand****Instructional Task:**Depending on your choice of increasing, decreasing, or keeping the current supply, what would happen to your new equilibrium price? (Where would your supply & demand curves intersect?)**Guideline:**USE THESE FINDINGS TO PRESENT YOUR RECOMMENDATION!**Graph Explanation:**The graph below illustrates the relationship between supply and demand, with price on the Y-axis and quantity on the X-axis. It contains:- Two supply curves (S1 and S2)- Two demand curves (D1 and D2)### Key Points on the Graph:1. **Initial Equilibrium:** - Point P1 represents the initial equilibrium where S1 (initial supply curve) and D1 (initial demand curve) intersect. This point corresponds to a price of $3.00 and a quantity of 10,000 units.2. **Change in Supply:** - If the supply increases (shifts from S1 to S2), the new equilibrium moves to point D2. At this point, the new supply curve S2 intersects with the original demand curve D1, resulting in a lower equilibrium price and a higher quantity. - Conversely, if the supply decreases (shifting left from S1), the supply curve would intersect the demand curve at a higher price and lower quantity than the initial equilibrium.3. **Change in Demand:** - When the demand increases (shifts from D1 to D2), the new equilibrium intersects at point D2, where the new demand curve intersects the original supply curve S1. This results in a higher equilibrium price and a higher quantity.### Recommendations:- **Increase Supply:** Results in a lower equilibrium price and higher quantity.- **Decrease Supply:** Results in a higher equilibrium price and lower quantity.- **Maintain Current Supply:** The equilibrium stays at P1.Use this analysis to assess the appropriate action based on the desired economic outcome.**Conclusion:**Evaluate the impacts of your choices on the equilibrium price and quantity before making supply decisions. The intersection of supply and demand curves (equilibrium points) will guide you on what happens to price and quantity when supply changes.

The supply curve of a good shows that quantity supplied and price are positively related to each…

Depending on your choice of increasing, decreasing, or keeping the current supply, what would happen to your new equilibrium price? (where would your supply & demand curves intersect? er: USE THESE FINDINGS TO PRESENT YOUR RECOMMENDATION! 法勞黃, ****** *** *** ******** Y axis (PRICE) s2 $4.50 s1 $3.50 $2.50 $1.50 D2 D1 X axis (QUANTITY) 10,000 20,000

Depending on your choice of increasing, decreasing, or keeping the current supply, what would happen to your new equilibrium price? (where would your supply & demand curves intersect? er: USE THESE FINDINGS TO PRESENT YOUR RECOMMENDATION! 法勞黃, **** * * ****** Y axis (PRICE) s2 $4.50 s1 $3.50 $2.50 $1.50 D2 D1 X axis (QUANTITY) 10,000 20,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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