The cost of producing refrigerators has fallen over the past decade. Let's consider some implications of this fact. a. Draw a supply-and-demand diagram to show the effect of falling production costs on the price and quantity of refrigerators sold. b. Suppose the supply of refrigerators is very elastic. Who benefits most from falling production costs - consumers or producers of these refrigerators? Please draw an extreme case, i.e. perfectly elastic supply.

The cost of producing refrigerators has fallen over the past decade. Let's consider some implications of this fact. a. Draw a supply-and-demand diagram to show the effect of falling production costs on the price and quantity of refrigerators sold. b. Suppose the supply of refrigerators is very elastic. Who benefits most from falling production costs - consumers or producers of these refrigerators? Please draw an extreme case, i.e. perfectly elastic supply.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...

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