Consider the market for paperbound economic textbooks. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied.
- The market
price of paper increases - The market price of economic textbooks increases
- The number of publishers of economics textbooks increases
- Publishers expect that the market price of economic textbooks will increase next month
Content information:
Supply refers to the quantities of goods sold in the market at a given set of prices. Supply is positively related to price. As price increases quantity supplied will increase and vice versa. A change in supply leads to a shift in the supply curve.
Quantity supplied refers to the amount of good sold in the market at a fixed price at a given point in time. Change in quantity supplied leads to a movement along the given supply curve.
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