PRCE (Dollars per pen) 4. Scenario 2 Equilibrium Object Price Quantity Supply QUANTITY (MIons of pens) O True Demand Scenario 1 0- Compare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them that wasn't apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens. Demand 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 change in the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate the resulting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If you cannot determine the answer without knowing the magnitude of the shifts, choose Cannot determine. Supply Change in Equilibrium Objects Scenario 2 When Shift Magnitudes Are Unknown True or False: When both the demand and supply curves shift, the curve that shifts by the larger magnitude determines the effect on the i undetermined equilibrium object.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
10
PRCE (Dollars per pent)
Scenario 2
Equilibrium Object
Price
Quantity
Supply
QUANTITY (Msons of pens)
O True
O False
Demand
Scenario 1
-O-
Demand
Compare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them that
wasn't apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens.
1
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 change
in the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate the
resulting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If you
cannot determine the answer without knowing the magnitude of the shifts, choose Cannot determine.
Supply
Change in Equilibrium Objects
Scenario 2
When Shift Magnitudes Are Unknown
True or False: When both the demand and supply curves shift, the curve that shifts by the larger magnitude determines the effect on the
undetermined equilibrium object.
Transcribed Image Text:10 PRCE (Dollars per pent) Scenario 2 Equilibrium Object Price Quantity Supply QUANTITY (Msons of pens) O True O False Demand Scenario 1 -O- Demand Compare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them that wasn't apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens. 1 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 change in the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate the resulting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If you cannot determine the answer without knowing the magnitude of the shifts, choose Cannot determine. Supply Change in Equilibrium Objects Scenario 2 When Shift Magnitudes Are Unknown True or False: When both the demand and supply curves shift, the curve that shifts by the larger magnitude determines the effect on the undetermined equilibrium object.
13. How shifts in demand and supply affect equilibrium
Consider the market for pens. Suppose that new medical concerns regarding graphite absorption have put pressure on schools to reduce pencil use in
favor of pens. Further, the price of ink, a major input in the pen production process, has increased sharply.
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 move a curve and it snaps back
to its original position, just drag it a little farther.
PRCE (Dolars per pen)
1 2
Scenario 1
Demand
3
5
0
7
QUANTITY (Millions of pens)
Demand
16
Supply
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 1
graph.
Transcribed Image Text:13. How shifts in demand and supply affect equilibrium Consider the market for pens. Suppose that new medical concerns regarding graphite absorption have put pressure on schools to reduce pencil use in favor of pens. Further, the price of ink, a major input in the pen production process, has increased sharply. 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 move a curve and it snaps back to its original position, just drag it a little farther. PRCE (Dolars per pen) 1 2 Scenario 1 Demand 3 5 0 7 QUANTITY (Millions of pens) Demand 16 Supply 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 1 graph.
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