Identify the demand or supply determinant(s) that changes and explain how the equilibrium price and equilibrium quantity in a purely competitive market will change in each of the following situations. Draw the appropriate demand and supply curves showing the change. (Each graph should have an equilibrium point before the change as well as after; be sure to label all parts of the graphs).
Identify the
a. Product: New homes -wages increases so consumer incomes increase and supply does not change
b. Product: French cheese- A tariff is removed from the importation of French cheese while demand remains the same.
C. Product: eat-at-home pizza- consumers desire for eating at home increases and the cost of flour (used to make pizza) decreases
Step by step
Solved in 4 steps with 3 images
