Answered: Question 2 Assume that each of the…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 45CTQ: Suppose both of these events took place at the same time. Combine your analyses of the impacts of...

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Question 2

Assume that each of the markets below is initially in equilibrium. Then for each
market below, suppose that the indicated scenario occurs. Illustrate the effect of each
event in a diagram and indicate the effects on the equilibrium price and quantity.

* Market: Airbnbs. Scenario: Hotels provide a discount to customers during the
winter.

* Market: Salmon. Scenario: The Ministry of Health warn that consumption of
salmon may lead to high cholesterol coupled with an increase in the price of
fish bait.

Question 2
Assume that each of the markets below is initially in equilibrium. Then for each
market below, suppose that the indicated scenario occurs. Illustrate the effect of each
event in a diagram and indicate the effects on the equilibrium price and quantity.

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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