Answered: Use the following table to answer the…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 3TY

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Question

Use the following table to answer the question below.

Quantity Demanded	Price	Quantity Supplied
5	$7	9
6	6	8
7	5	7
8	4	6
9	3	5
10	2	4
11	1	3

If demand decreased by 4 units at each price, what would the new equilibrium price and quantity be?

Multiple Choice

$3 and 5 units
$4 and 6 units
$5 and 7 units
$6 and 8 units

Assume that the graphs show a competitive market for the product stated in the question.

In graph 1, an increasing line, S intersects two decreasing lines, D1 and D2 at points E1 and E2, respectively. A positive shift from D1 to D2 (to the right) is shown with an increase in price from P1 to P2 and increase in quantity from q1 to q2. In graph 2, an increasing line, S intersects two decreasing lines, D1 and D2 at points E1 and E2, respectively. A negative shift from D1 to D2 (to the left) is shown with a decrease in price from P1 to P2 and decease in quantity from q1 to q2. In graph 3, two increasing lines, S1 and S2 intersects a decreasing line, D at points E1 and E2, respectively. A positive shift from S1 to S2 (to the right) is shown with a decrease in price from P1 to P2 and increase in quantity from Q1 to Q2. In graph 4, two increasing lines, S1 and S2 intersects a decreasing line, D at points E1 and E2, respectively. A negative shift from S1 to S2 (to the left) is shown with an increase in price from P1 to P2 and decease in quantity from Q1 to Q2.

Select the graph above that best shows the change in the market for leather coats when leather coats become more fashionable among young consumers.

Multiple Choice

graph (1)
graph (2)
graph (3)
graph (4)

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