Predict the impact on equilibrium price and quantity for the relevant markets given the following changes. 1. What would happen in the market for office buildings if: d). the number of firms that build offices declined. e). The price of cement rose. Please support answers with a graph.
2. Predict the impact on
1. What would happen in the market for office buildings if:
d). the number of firms that build offices declined. e). The price of cement rose.
Please support answers with a graph.
Equilibrium price and quantity is achieved when demand and supply are equal.
In the market for office buildings:
If the number of firms that build offices declined then the number of office buildings to be build will decline. The supply will fall (and shift leftwards) as the input factor that is firms that build offices decline. This will cause a fall in equilibrium quantity from Q to Q1 and the rise in the price from P to P1 in market for office buildings.
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