d. Suppose income increases and consumers are willing and able to buy 100 more units at each price. Construct the new demand curve and label it D₂. What is the new equilibrium price and quantity? e. Suppose input prices fall and suppliers are willing to offer for sale 200 more units at each price. Construct the new supply curve, and label it S₂. What are the new equilibrium price and quantity when the supply and demand curves are D₂ and S₂?
d. Suppose income increases and consumers are willing and able to buy 100 more units at each price. Construct the new demand curve and label it D₂. What is the new equilibrium price and quantity? e. Suppose input prices fall and suppliers are willing to offer for sale 200 more units at each price. Construct the new supply curve, and label it S₂. What are the new equilibrium price and quantity when the supply and demand curves are D₂ and S₂?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:5. Use the graph below to answer the following questions.
70
60
50
40
30
20
10
0
D1
100 200
300 400 500
S1
600
700 Q
Transcribed Image Text:c. What happens when the price is above equilibrium?
|
d. Suppose income increases and consumers are willing and able to buy
100 more units at each price. Construct the new demand curve and label it
D₂. What is the new equilibrium price and quantity?
e. Suppose input prices fall and suppliers are willing to offer for sale 200
more units at each price. Construct the new supply curve, and label it S₂.
What are the new equilibrium price and quantity when the supply and
demand curves are D₂ and S₂?
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