Econ Macro (book Only)
6th Edition
ISBN: 9781337408745
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 4, Problem 13P
To determine
If the given statements as True, false, or uncertain and explanation for each option chosen.
Concept Introduction:
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12. Market equilibrium and disequilibrium
The following graph shows the monthly demand and supply curves in the market for calendars.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
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4-1 You have noticed that the price of season tickets to your university’s football matches keeps increasing but the supply of tickets remains the same. Why might supply be unresponsive to changes in price? In the longer term, would it be more responsive? How?
Question 3 Market equilibrium is a market state where the supply in the market is equal to the demand in the market. Required:
a) Using a suitable diagram to illustrate your answer, explain how the market is ‘self-correcting’ and returns to an equilibrium position if initially the market price was set below the equilibrium market price.
b) In the summer, it was observed that there was a decrease in both the price of umbrellas and the quantity of umbrellas sold. Explain this observation in supply and demand terms using diagram.
c) If the demand and supply curve for hats are given by the following equations: D = 140 – 7P S = 20 + 3P Where P is the price of hats. Showing all workings, calculate the quantity of hats bought and sold at equilibrium. d) State five factors which could cause the demand curve to shift right.
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