Chapter 3, Problem 10P

To determine

(a) Lower equilibrium price and lower equilibrium quantity.
(b) Lower equilibrium price and higher equilibrium quantity.
(c) Account on which case (a) or case (b) occur.
(d) Actions taken by scalper on secretly learning about the announcement.

Concept Introduction

Demand: The demand of a product or service in the market is derived by the willingness to purchase and ability of the consumers to pay for the purchase.

Supply: The supply of a product or service means making available a specific product or service to the consumers at a specific price.

Equilibrium Price: The equilibrium price is the market price at which the quantity demanded by the consumers equals the quantity supplied by the producers.

Equilibrium Quantity: The equilibrium quantity is that quantity where the demand and supply of a product or service is equal.