Suppose during a summer , unexpected rains and subsidized fertilizers allows the crop of sugar cane to be higher than usual. This leads to increased supply of sugar in the market economy. Considering this scenario, answer the questions a) How this event affects the price of Sugar? b) If sugar and ice cream are compliments then how the supply of ice cream would be affected? c) Keeping the conditions of part (b), Explain whether there is a shift or movement in supply curve of ice cream d) As a result of increased supplies of sugar, whether there is a shortage or ice cream or surplus of ice cream in the market economy and why? e) If the new equilibrium is formed, what happened to new price and new quantity? whether they are different from previous values of equilibrium quantity and equilibrium price or not? Regards....
Suppose during a summer , unexpected rains and subsidized fertilizers allows the crop of sugar cane to be higher than usual. This leads to increased supply of sugar in the market economy. Considering this scenario, answer the questions a) How this event affects the price of Sugar? b) If sugar and ice cream are compliments then how the supply of ice cream would be affected? c) Keeping the conditions of part (b), Explain whether there is a shift or movement in supply curve of ice cream d) As a result of increased supplies of sugar, whether there is a shortage or ice cream or surplus of ice cream in the market economy and why? e) If the new equilibrium is formed, what happened to new price and new quantity? whether they are different from previous values of equilibrium quantity and equilibrium price or not? Regards....
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose during a summer , unexpected rains and subsidized fertilizers allows the crop of sugar cane to be higher than usual. This leads to increased supply of sugar in the market economy.
Considering this scenario, answer the questions
a) How this event affects the price of Sugar?
b) If sugar and ice cream are compliments then how the supply of ice cream would be affected?
c) Keeping the conditions of part (b), Explain whether there is a shift or movement in supply curve of ice cream
d) As a result of increased supplies of sugar, whether there is a shortage or ice cream or surplus of ice cream in the market economy and why?
e) If the new equilibrium is formed, what happened to new price and new quantity? whether they are different from previous values of equilibrium quantity and equilibrium price or not?
Regards....
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