Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 4, Problem 4P
To determine
The reason the firm increases the quantity supplied when the
Concept Introduction:
Law of supply states that as the price of the good, increases the quantity supplied of the good increases and vice-versa, other things remaining same.
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2.2. Use a diagram to illustrate what will happen to the equilibrium price and quantity of a product
if the demand for the product increases. Also mention three factors that can cause an increase in
demand.
(10)
(Figure: The Supply of Apple TV Rentals) Use Figure: The Supply of Apple TV Rentals. An increase in the price of online
movie rentals would result in the change illustrated by the move from:
Price of
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Price of
Apple TV
rental
n
(a)
Quantity (per period)
(c)
Quantity (per period)
Price of
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Price of
Apple TV
rental.
0
(b)
S₂
S₁
Quantity (per period)
(d)
Quantity (per period)
Price
(per bushel)
$10
9.
8
7.
6.
4
3.
21
2.
4
6 8 10
12
Quantity of wheat
(thousands of bushels per period)
Reference: Ref 3-6 Figure The Demand and Supply of Wheat
(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of
Wheat. A price of
will result in a
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