Suppose the absolute values of the intercept and slope of the demand function are approximated to be ten (10) and three (3) respectively. If the absolute values of the intercept and slope of the supply function are assessed to be six (6), and five (5) respectively, calculate equilibrium price and quantity b. Suppose the intercept of the demand function increases by two (2), while the slope remains the same. If the supply function remains the same, estimate the new equilibrium price and quantity - Demonstrate graphically, the effect of the increase in the intercept of the demand function in (b) above on the equilibrium quantity and price. What generalization can you come up with from the resulting graphical analysis?
Suppose the absolute values of the intercept and slope of the
calculate
b. Suppose the intercept of the demand function increases by two (2), while the
slope remains the same. If the supply function remains the same, estimate the
new equilibrium price and quantity
- Demonstrate graphically, the effect of the increase in the intercept of the
demand function in (b) above on the
generalization can you come up with from the resulting graphical analysis?
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