Assume that the equilibrium price is at $3 and equilibrium quantity is at 40 units of a product. Then, imagine that suddenly any of determinants of demand, other than the price of the product, caused demand to increase while, at the same time, one of determinants of supply, other than the price of the product, caused supply to decrease. TASK: First, draw the demand and supply graph to show the original equilibrium price at $3 and equilibrium quantity at 40 units.Second pick ONE specific DETERMINANT of DEMAND and ONE specific DETERMINANT of SUPPLYThird, show in the graph what it looked like if demand increased and supply decreased (select where you think that the new price and quantity would change to), what the new equilibrium price and equilibrium quantity would be, after both changes in demand and supply occurred.Fourth, in a couple of words, write down what would be YOUR new equilibrium price and equilibrium quantity. [That is, tell us that the original equilibrium price increased or decreased to which specific new equilibrium price, after the changes occurred; also tell us that the original equilibrium quantity increased or decreased to which specific new equilibrium quantity, after the changes occurred] 1. Assume that the equilibrium price is at $3 and equilibriumquantity is at 40 units of a product. Then, imagine thatsuddenly any of determinants of demand, other than theprice of the product, caused demand to increase while, atthe same time, one of determinants of supply, other than theprice of the product, caused supply to decrease.TASK:First, draw the demand and supply graph to show theoriginal equilibrium price at $3 and equilibrium quantity at40 units.Second pick ONE specific DETERMINANT of DEMANDand ONE specific DETERMINANT of SUPPLYThird, show in the graph what it looked like if demandincreased and supply decreased (select where you think thatthe new price and quantity would change to), what the newequilibrium price and equilibrium quantity would be, afterboth changes in demand and supply occurred.Fourth, in a couple of words, write down what would beYOUR new equilibrium price and equilibrium quantity.[That is, tell us that the original equilibrium price increasedor decreased to which specific new equilibrium price, afterthe changes occurred; also tell us that the originalequilibrium quantity increased or decreased to whichspecific new equilibrium quantity, after the changesoccurred]

The equilibrium is the point at which the demand and supply curves intersect. The equilibrium price…

Answered: 1. Assume that the equilibrium price is…

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 11PA

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Assume that the equilibrium price is at $3 and equilibrium quantity is at 40 units of a product. Then, imagine that suddenly any of determinants of demand, other than the price of the product, caused demand to increase while, at the same time, one of determinants of supply, other than the price of the product, caused supply to decrease.

TASK:

First, draw the demand and supply graph to show the original equilibrium price at $3 and equilibrium quantity at 40 units.

Second pick ONE specific DETERMINANT of DEMAND and ONE specific DETERMINANT of SUPPLY

Third, show in the graph what it looked like if demand increased and supply decreased (select where you think that the new price and quantity would change to), what the new equilibrium price and equilibrium quantity would be, after both changes in demand and supply occurred.

Fourth, in a couple of words, write down what would be YOUR new equilibrium price and equilibrium quantity. [That is, tell us that the original equilibrium price increased or decreased to which specific new equilibrium price, after the changes occurred; also tell us that the original equilibrium quantity increased or decreased to which specific new equilibrium quantity, after the changes occurred]

1. Assume that the equilibrium price is at $3 and equilibrium
quantity is at 40 units of a product. Then, imagine that
suddenly any of determinants of demand, other than the
price of the product, caused demand to increase while, at
the same time, one of determinants of supply, other than the
price of the product, caused supply to decrease.
TASK:
First, draw the demand and supply graph to show the
original equilibrium price at $3 and equilibrium quantity at
40 units.
Second pick ONE specific DETERMINANT of DEMAND
and ONE specific DETERMINANT of SUPPLY
Third, show in the graph what it looked like if demand
increased and supply decreased (select where you think that
the new price and quantity would change to), what the new
equilibrium price and equilibrium quantity would be, after
both changes in demand and supply occurred.
Fourth, in a couple of words, write down what would be
YOUR new equilibrium price and equilibrium quantity.
[That is, tell us that the original equilibrium price increased
or decreased to which specific new equilibrium price, after
the changes occurred; also tell us that the original
equilibrium quantity increased or decreased to which
specific new equilibrium quantity, after the changes
occurred]

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