Utilize the following graph, which illustrates the changes in the mock beef market, to answer the following question: P 35 100 D₁ So Do Q All of the available answers are correct. S₁ Question: Can we say with certainty what happened to the equilibrium quantity in the mock beef market? Why or why not? O No we cannot say with certainty what exactly happened to the equilibrium quantity. The shift in supply to the right, increases supply and creates excess supply, which tends to decrease price and increase equilibrium quantity. However, there is a counter-balancing force with the simultaneous decrease in demand with the shifting of the demand curve to the left. This tends to decrease equilibrium quantity. So there are two movements in quantity moving in the opposite direction that are essentially cancelling each other out. We are not given any information about the relative size of the shifts, so we don't know which force is the dominating force. O Yes we can say with certainty what exactly happened to the equilibrium quantity. The shift in supply to the right, decreases supply and creates excess demand, which tends to increase price and decrease equilibrium quantity. However, there is a counter-balancing force with the simultaneous decrease in demand with the shifting of the demand curve to the left. This tends to decrease equilibrium quantity. O Yes we can say that equilibrium quantity will decrease because the decrease in demand will swamp the increase quantity, brought about by the increase in supply. Decreases in demand are always more powerful than movements in supply in a market.
Utilize the following graph, which illustrates the changes in the mock beef market, to answer the following question: P 35 100 D₁ So Do Q All of the available answers are correct. S₁ Question: Can we say with certainty what happened to the equilibrium quantity in the mock beef market? Why or why not? O No we cannot say with certainty what exactly happened to the equilibrium quantity. The shift in supply to the right, increases supply and creates excess supply, which tends to decrease price and increase equilibrium quantity. However, there is a counter-balancing force with the simultaneous decrease in demand with the shifting of the demand curve to the left. This tends to decrease equilibrium quantity. So there are two movements in quantity moving in the opposite direction that are essentially cancelling each other out. We are not given any information about the relative size of the shifts, so we don't know which force is the dominating force. O Yes we can say with certainty what exactly happened to the equilibrium quantity. The shift in supply to the right, decreases supply and creates excess demand, which tends to increase price and decrease equilibrium quantity. However, there is a counter-balancing force with the simultaneous decrease in demand with the shifting of the demand curve to the left. This tends to decrease equilibrium quantity. O Yes we can say that equilibrium quantity will decrease because the decrease in demand will swamp the increase quantity, brought about by the increase in supply. Decreases in demand are always more powerful than movements in supply in a market.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:Utilize the following graph, which illustrates the changes in the mock beef market, to answer the following question:
P
35
100
D₁
So
Do
Q
All of the available answers are correct.
S₁
Question:
Can we say with certainty what happened to the equilibrium quantity in the mock beef market? Why or why not?
O No we cannot say with certainty what exactly happened to the equilibrium quantity. The shift in supply to the right, increases supply and creates excess supply, which tends to decrease price and increase equilibrium
quantity. However, there is a counter-balancing force with the simultaneous decrease in demand with the shifting of the demand curve to the left. This tends to decrease equilibrium quantity. So there are two movements in
quantity moving in the opposite direction that are essentially cancelling each other out. We are not given any information about the relative size of the shifts, so we don't know which force is the dominating force.
O Yes we can say with certainty what exactly happened to the equilibrium quantity. The shift in supply to the right, decreases supply and creates excess demand, which tends to increase price and decrease equilibrium quantity.
However, there is a counter-balancing force with the simultaneous decrease in demand with the shifting of the demand curve to the left. This tends to decrease equilibrium quantity.
O Yes we can say that equilibrium quantity will decrease because the decrease in demand will swamp the increase quantity, brought about by the increase in supply. Decreases in demand are always more powerful than
movements in supply in a market.
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