The following statements contain common errors. Identify and explain each error using the demand-supply graph. The price of tomatoes increases which increases supply in the market. The market demand curve for tomatoes shift back as a result of increase in price bringing prices back to the original level. The demand for warm clothes is observed to increase during the month of December in Karachi. This means the price for warm clothes would fall. 3.The lockdown has caused shutdown of many local fast food outlets. Assuming that the market for fast food is competitive, there will be increase in demand for fast food leading to higher prices.
The following statements contain common errors. Identify and explain each error using the demand-supply graph. The price of tomatoes increases which increases supply in the market. The market demand curve for tomatoes shift back as a result of increase in price bringing prices back to the original level. The demand for warm clothes is observed to increase during the month of December in Karachi. This means the price for warm clothes would fall. 3.The lockdown has caused shutdown of many local fast food outlets. Assuming that the market for fast food is competitive, there will be increase in demand for fast food leading to higher prices.
Chapter3: Market Demand And Supply
Section: Chapter Questions
Problem 11SQ
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The following statements contain common errors. Identify and explain each error using the demand-supply graph.
- The price of tomatoes increases which increases supply in the market. The market demand curve for tomatoes shift back as a result of increase in price bringing prices back to the original level.
- The demand for warm clothes is observed to increase during the month of December in Karachi. This means the price for warm clothes would fall.
3.The lockdown has caused shutdown of many local fast food outlets. Assuming that the market for fast food is competitive, there will be increase in demand for fast food leading to higher prices.
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