Consider the market for pens. Suppose that new research has been published stating that the process of writing, erasing, and rewriting Improvesmemorization, leading parents to avoid giving their children pens in favor of pencils. Further, the price of plastic, a major input in the pen productionprocess, has increased sharply.On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens.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.9821Scenario 1SupplyDemand02367B910QUANTITY (Milions of pans)Demand} }SupplyNext, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario Igraph.Scenario 2SupplyDemandDemand910QUANTITY (Millions of pens)---SupplyCompare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them thatwasn't apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens.Use the results of your answers on both the Scenario I and Scenario 2 graphs to complete the following table. Begin by Indicating the overall changein the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate theresulting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If youcannot determine the answer without knowing the magnitude of the shifts, choose Cannot determine.Equilibrium ObjectScenario 1PriceQuantityChange In Equilibrium ObjectsScenario 2When Shift Magnitudes Are UnknownTrue or False: When both the demand and supply curves shift, the curve that shifts by the smaller magnitude determines the effect on theundetermined equilibrium object.TrueO False

Market demand for a commodity can shift as a result of a change in consumer income, their tastes and…

PRICE (Dollars per pen) PRICE (Dollars per pen) Consider the market for pens. Suppose that new research has been published stating that the process of writing, erasing, and rewriting improves memorization, leading parents to avoid giving their children pens in favor of pencils. Further, the price of plastic, a major input in the pen production process, has increased sharply. On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens. 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. 10 1 2 4 Scenario 1 Supply Demand Demand 7 9 10 QUANTITY (Millions of pens) Supply Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1 graph. 1 10 9 B Scenario 2 0 1 2 4 5 6 7 QUANTITY (Millions of pens) Supply Demand Demand 9 10 Supply

PRICE (Dollars per pen) PRICE (Dollars per pen) Consider the market for pens. Suppose that new research has been published stating that the process of writing, erasing, and rewriting improves memorization, leading parents to avoid giving their children pens in favor of pencils. Further, the price of plastic, a major input in the pen production process, has increased sharply. On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens. 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. 10 1 2 4 Scenario 1 Supply Demand Demand 7 9 10 QUANTITY (Millions of pens) Supply Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1 graph. 1 10 9 B Scenario 2 0 1 2 4 5 6 7 QUANTITY (Millions of pens) Supply Demand Demand 9 10 Supply

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.3P

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Consider the market for pens. Suppose that a new educational study has proven that the practice of writing, erasing, and rewriting improves students' ability to process information, leading parents to steer away from pen use in favor of pencils. Moreover, the price of ink, an important input in pen production, has increased considerably. On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens. (graph in photo 1) Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1 graph. (graph in photo 2) Compare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them that wasn't apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens. Use the results of your answers on…
Consider the market for pens. Suppose that new research has been published stating that the process of writing, erasing, and rewriting improves memorization, leading parents to avoid giving their children pens in favor of pencils. Further, the price of plastic, a major input in the pen production process, has dropped sharply. On the following graph, labeled Scenario 1, indicate the effect these two events have on the demand for and supply of pens. 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. image 1 image 2 Compare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them that wasn't apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens. Use the results of your…
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