Answered: The figure depicts the market for…

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 8TY

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Question

The figure depicts the market for shoes. Suppose that a less expensive material for making shoes is developed. What effect will this event have on supply and demand in the shoe market? Demonstrate your answer graphically. Instructions: Use the tool provided "New line" to draw either a new demand or supply curve that reflects the market effect of this event. Plot only the endpoints of the line. if a less expensive material developed, the- will-. This will cause the equilibrium price to- and the equilibrium- quantity to-

The figure depicts the market for shoes. Suppose that a less expensive material for making shoes is developed.
a. What effect will this event have on supply and demand in the shoe market? Demonstrate your answer graphically.
Instructions: Use the tool provided 'New line' to draw either a new demand or supply curve that reflects the market effect of this
event. Plot only the endpoints of the line.
Market for Shoes
Tools
S
New line
Quantity of shoes
Price ($)

b. If a less expensive material is developed, the (Click to select)
: will ( (Click to select) :
This will cause the equilibrium price to (Click to select) and the equilibrium quantity to ((Click to select) :

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