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For each case below, explain the effect on the supply and/or demand in the market for bicycles. Discuss the effects on the equilibrium price and quantity. a. The price of aluminum used to make bicycles increases. b. The average income of consumers decreases.

For each case below, explain the effect on the supply and/or demand in the market for bicycles. Discuss the effects on the equilibrium price and quantity. a. The price of aluminum used to make bicycles increases. b. The average income of consumers decreases.

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter4: The Market Forces Of Supply And Demand
Section: Chapter Questions
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For each case below, explain the effect on the supply and/or demand in the market for bicycles. Discuss the effects on the equilibrium price and quantity. a. The price of aluminum used to make bicycles increases. b. The average income of consumers decreases. Both (a) and (b) happen simultaneously. For 0.5 bonus points only: Show the effect of both events on a graph. Label all your curves and axes. C.
Transcribed Image Text:For each case below, explain the effect on the supply and/or demand in the market for bicycles. Discuss the effects on the equilibrium price and quantity. a. The price of aluminum used to make bicycles increases. b. The average income of consumers decreases. Both (a) and (b) happen simultaneously. For 0.5 bonus points only: Show the effect of both events on a graph. Label all your curves and axes. C.
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