3. Over the past few years in the market for solar panels, we have seen lower prices and more panels being sold. a) Draw a supply-demand diagram for the market, showing the initial equilibrium price and quantity (indicated with P,*, Q* on the P and Q axes respectively.) b) What one curve (supply or demand) must have shifted, and in what direction, to cause both a decrease in price and an increase in quantity sold in the solar panel market? Illustrate this on your graph in part (a) (Show the new curve and the resulting new equilibrium price and quantity (indicated with P,*, Q,*.) c) Briefly describe two different events that might cause the shift you described above in the market for solar panels.
3. Over the past few years in the market for solar panels, we have seen lower prices and more panels being sold. a) Draw a supply-demand diagram for the market, showing the initial equilibrium price and quantity (indicated with P,*, Q* on the P and Q axes respectively.) b) What one curve (supply or demand) must have shifted, and in what direction, to cause both a decrease in price and an increase in quantity sold in the solar panel market? Illustrate this on your graph in part (a) (Show the new curve and the resulting new equilibrium price and quantity (indicated with P,*, Q,*.) c) Briefly describe two different events that might cause the shift you described above in the market for solar panels.
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
Problem 25P
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