The equilibrium price of televisions fell significantly in the past month, however the equilibrium quantity remained unchanged. Three individuals provided an explanation for the situation. Which explanation(s) could be correct?Explain your logic.Mark: Demand increased, but supply was totally inelastic.Shawn: Supply increased, but so did demand.Annica: Supply decreased, but demand was totally inelasticFor each of the following pairs of goods, which good would you expect to have more elastic demand and why?Required textbooks or fictional novelsAllison Hinds music recordings or soca music recordings in generalAirfare during the next 4 months or airfare during the next 5 yearsFruit juice or waterTracey usually pays a price between $6 and $10 per pound of rice. Her monthly total expenditure on rice increases as the price decreases. What does this imply about her price elasticity of demand for rice?

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Answered: The equilibrium price of televisions…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The equilibrium price of televisions fell significantly in the past month, however the equilibrium quantity remained unchanged. Three individuals provided an explanation for the situation. Which explanation(s) could be correct?

Explain your logic.

Mark: Demand increased, but supply was totally inelastic.
Shawn: Supply increased, but so did demand.
Annica: Supply decreased, but demand was totally inelastic

For each of the following pairs of goods, which good would you expect to have more elastic demand and why?

Required textbooks or fictional novels
Allison Hinds music recordings or soca music recordings in general
Airfare during the next 4 months or airfare during the next 5 years
Fruit juice or water

Tracey usually pays a price between $6 and $10 per pound of rice. Her monthly total expenditure on rice increases as the price decreases. What does this imply about her price elasticity of demand for rice?

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