The demand and supply.

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Chapter 3, Problem 3.4.14PA

To determine

The demand and supply.

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A student was asked to draw a demand and supply graph to illustrate the effect on the market for premium bottled water of a fall in the price of electrolytes used in some brands of premium bottled water, holding everything else constant. She drew the graph to the right and explained it as follows: "Electrolytes are an input to some brands of premium bottled water, so a fall in the price of electrolytes will cause the supply curve for premium bottled water to shift to the right (from S, to S₂). Because this shift in the supply curve results in a lower price (P₂), consumers will want to buy more premium bottled water and the demand curve will shift to the right (from D, to D₂) We know that more premium bottled water will be sold, but we can't be sure whether the price of premium bottled water will rise or fall. That depends on whether the supply curve or the demand curve has shifted farther to the right. I assume that the effect on supply is greater than the effect on demand, so I show…

Briefly describe four general categories of phenomena that could cause a demand curve to shift.

The following graph presents the market for bikes in 2016. Between 2016 and 2017, the equilibrium price of bikes remained constant, but the equilibrium quantity of bikes increased. Given this information, you can conclude that between 2016 and 2017, the supply of bikes and the demand for bikes Make changes to the graph to illustrate your answer by showing the positions of the supply and demand curves in 2017. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther." PRICE (Dollars per bike) QUANTITY (Bikes) Supply Demand Demand Supply ?