Use the results of your answers on both the Scenario 1 and Scenario 2 graphs to complete the following table. Begin by indicating the overall change in the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate the resulting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If you cannot determine the answer without knowing the magnitude of the shifts, choose Cannot determine. Equilibrium Object Price Quantity True Scenario 1 False Change in Equilibrium Objects Scenario 2 Cannot determine True or False: When both the demand and supply curves shift, the curve that shifts by the lar undetermined equilibrium object. When Shift Magnitudes Are Unknown Cannot determine Decreases Increases mines the effect on the

Use the results of your answers on both the Scenario 1 and Scenario 2 graphs to complete the following table. Begin by indicating the overall change in the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate the resulting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If you cannot determine the answer without knowing the magnitude of the shifts, choose Cannot determine. Equilibrium Object Price Quantity True Scenario 1 False Change in Equilibrium Objects Scenario 2 Cannot determine True or False: When both the demand and supply curves shift, the curve that shifts by the lar undetermined equilibrium object. When Shift Magnitudes Are Unknown Cannot determine Decreases Increases mines the effect on the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Use the results of your answers on both the Scenario 1 and Scenario graphs to complete the following table. Begin by indicating the overall change
in the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate the
resulting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If you
cannot determine the answer without knowing the magnitude of the shifts, choose Cannot determine.
Equilibrium Object
Price
Quantity
True
Scenario 1
False
Change in Equilibrium Objects
Scenario 2
Cannot determine
True or False: When both the demand and supply curves shift, the curve that shifts by the lar
undetermined equilibrium object.
When Shift Magnitudes Are Unknown
Cannot determine
Decreases
Increases
mines the effect on the

13. How shifts in demand and supply affect equilibrium
Consider the market for pens. Suppose that the number of students who are allergic to the rubber used pencil erasers increases, leading more
students to switch from pencils to pens in school. Further, the price of ink, a major input in the pen production process, has increased sharply.
On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back
to its original position, just drag it a little farther.
PRICE (Dollars per pen)
10
9
8
7
3
2
1
O
0 1
2
Scenario 1
3
Supply
Demand
4
5
6
7
QUANTITY (Millions of pens)
8
9
10
Demand
Supply
(?)

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Step 1: Demand-supply equilibrium:

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Step 2: Scenario 1

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Step 3: Scenario 2

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Step 4: When shift magnitudes are unknown:

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