Beachfront resorts have an inelastic supply, and automobiles have an elastic supply. Suppose that a rise in population doubles the demand for both products (that is, the quantity demanded at each price is twice what it was). a. What happens to the equilibrium price and quantity in each market? b. Which product experiences a larger change in price? c. Which product experiences a larger change in quantity?

Macroeconomics
13th Edition
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter3: Supply And Demand: Theory
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Q: Beachfront resorts have an inelastic supply, and automobiles have an elastic
supply. Suppose that a rise in population doubles the demand for both products
(that is, the quantity demanded at each price is twice what it was).
a. What happens to the equilibrium price and quantity in each market?
b. Which product experiences a larger change in price?
c. Which product experiences a larger change in quantity?
d. What happens to total consumer spending on each product?

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