Chapter 3, Problem 24QP

(a)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the demand rises and supply is constant, the equilibrium price and equilibrium quantity would increase. An increase in demand shifts the demand curve rightward, which leads to shift the equilibrium point. At the new aquarium point, the price level and quantity demanded are higher.

Economics Concept Introduction

Equilibrium price: Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services available for purchase at a particular price in a given period of time.

(b)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the demand falls and supply is constant, the equilibrium price and equilibrium quantity would decrease. The decrease in demand shifts the demand curve leftward, which leads to shift the equilibrium point. At the new equilibrium point, the price level and quantity demanded are lesser.

Economics Concept Introduction

Equilibrium price: Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.

(c)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the supply rises and demand is constant, the equilibrium price would fall and equilibrium quantity would increase. An increase in supply shifts the supply curve rightward, which leads to shift the equilibrium point. At the new aquarium point, the price is lower and quantity demanded is higher.

Economics Concept Introduction

Equilibrium price: Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.

(d)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the supply falls and demand is constant, the equilibrium price would rise and equilibrium quantity would fall. The fall in supply shifts the supply curve leftward, which leads to shift the equilibrium point. At the new aquarium point, the price is higher and the quantity demanded is lower.

Economics Concept Introduction

Equilibrium price: Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.

(e)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the demand rises by the same amount as the supply falls, the equilibrium price would increase and quantity demanded would remain the same.

Economics Concept Introduction

Equilibrium price:  Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.

(f)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the demand falls by the same amount as supply rises, the equilibrium price would decrease and quantity demanded would remain the same.

Economics Concept Introduction

Equilibrium price: Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.

(g)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the demand falls less than the supply rises, the equilibrium price would decrease and equilibrium quantity would rise.

Economics Concept Introduction

Equilibrium price: Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.

(h)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the demand rises more than supply rises, the equilibrium price and quantity would increase.

Economics Concept Introduction

Equilibrium price: Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.

(i)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the demand rises less than the supply rises, the equilibrium price would fall and quantity would increase.

Economics Concept Introduction

Equilibrium price: Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.

(j)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the demand falls more than the supply falls, the equilibrium price and quantity would decrease.

Economics Concept Introduction

Equilibrium price: Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.

(k)

To determine

Identify the changes in equilibrium price and equilibrium quantity.

Explanation of Solution

If the demand falls less than the supply falls, the equilibrium price would increase and quantity would decrease.

Economics Concept Introduction

Equilibrium price: Equilibrium price is the market price determined by the interaction between the quantity demanded and the quantity supplied.

Equilibrium quantity: Equilibrium quantity is the point where the quantity demanded is equal to the quantity supplied.

Demand: Demand refers to the total value of the goods and services that are demanded at a particular price in a given period of time.

Supply: Supply refers to the total value of the goods and services that are available for purchase at a particular price in a given period of time.