Chapter4: Markets In Action
Section: Chapter Questions
Problem 6SQ
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Question
Show the change graphically for a simultaneous decrease in
- Demand changes by a larger magnitude than Supply
- Demand changes by a smaller magnitude than Supply
- Demand and Supply changes by the same magnitude.
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Step 1: Introduce the concept of equilibrium price and quantity.
VIEWStep 2: 1. Determine the changes when demand decreases by a larger magnitude than increase in supply
VIEWStep 3: 2. Determine the changes when demand decreases by a smaller magnitude than increase in supply
VIEWStep 4: 3. Determine the changes when demand decreases by an equal magnitude than increase in supply.
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