Solve it! 13. How shifts in demand and supply affect equilibriumConsider the market for pens. Suppose that the number of students who are allergic to the rubber used in pencil erasers increases, leading morestudents to switch from pencils to pens in school. Further, the price of ink, 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 backto its original position, just drag it a little farther.PRICE (Dollars per pen)10982100 12Scenario 13SupplyDemand4567QUANTITY (Millions of pens)8910DemandSupply 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 1graph.PRICE (Dollars per pen)1098732100Price1Equilibrium ObjectQuantity2TrueScenario 2■1IFalseSupply3 4567QUANTITY (Millions of pens)DemandScenario 1IncreasesDecreases8Compare 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.9Use the results of your answers on both the Scenario 1 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.10中翼中国DemandIncreasesSupplyIncreases?Change in Equilibrium ObjectsScenario 2When Shift Magnitudes Are UnknownIncreasesTrue 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.Cannot determine

The point of equilibrium shows a theoretical state of rest where all economic transactions that…

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. PRICE (Dollars per pen) 10 9 8 2 1 0 0 + 1 2 Scenario 1 3 Supply Demand 4 7 5 6 QUANTITY (Millions of pens) 8 9 10 Demand Supp

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. PRICE (Dollars per pen) 10 9 8 2 1 0 0 + 1 2 Scenario 1 3 Supply Demand 4 7 5 6 QUANTITY (Millions of pens) 8 9 10 Demand Supp

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 11PA

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13. How shifts in demand and supply affect equilibrium Consider the market for pens. Suppose that new medical concerns regarding graphite absorption have put pressure on schools to reduce pencil use in favor of pens. Further, the price of ink, 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. PRCE (Dolars per pen) 1 2 Scenario 1 Demand 3 5 0 7 QUANTITY (Millions of pens) Demand 16 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.
13. How shifts in demand and supply affect equilibrium Consider the market for pens. Suppose that the number of students who are allergic to the rubber used in pencil erasers increases, leading more students to switch from pencils to pens in school. 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. PRICE (Dollars per pen) 10 PRICE (Dollars per pen) 9 8 1 0 10 9 8 1 0 0 1 0 2 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. 2 Scenario 1 Supply 3 5 6 7 QUANTITY (Millions of pens) 3 Demand Scenario 2 8 Supply 4 5…
3. Assume that the equilibrium price is at $3 and equilibrium quantity is at 40 units of a product. Then, imagine that suddenly any of determinants of demand, other than price of the product, caused demand to increase while at the same time one of the determinants of supply, other than the price of the product, caused supply to increase. TASK: First, draw the demand and supply graph to show the original equilibrium price at $3 and equilibrium quantity at 40 units. Second pick ONE (different than above) DETERMINANT of DEMAND and ONE (different than above) DETERMINANT of SUPPLY Third, show in the graph what it looked like if both demand and supply increased (select where you think that the new price and quantity would change to), what the new equilibrium price and equilibrium quantity would be, after both changes in demand and supply occurred. Fourth, in a couple of words, write down what would be that YOUR new equilibrium price and equilibrium quantity. [That is, tell us that the…
2. Assume that the equilibrium price is at $3 and equilibrium quantity is at 40 units of a product. Then, imagine that suddenly any of determinants of demand, other than price of the product, caused demand to decrease while at the same time one of the determinants of supply, other than the price of the product, caused supply to increase. TASK: First, draw the demand and supply graph to show the original equilibrium price at $3 and equilibrium quantity at 40 units. Second pick ONE different DETERMINANT of DEMAND and ONE different DETERMINANT of SUPPLY Third, show in the graph what it looked like if demand decreased and supply increased (select where you think that the new price and quantity would change to), what the new equilibrium price and equilibrium quantity would be, after both changes in demand and supply occurred. Fourth, in a couple of words, write down what would be that YOUR new equilibrium price and equilibrium quantity. [That is, tell us that the original equilibrium price…
Use the results of your answers on both the Scenario 1 and Scenario graphs to complete the following table. Begin by indicating the overall change in the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate the resulting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If you cannot determine the answer without knowing the magnitude of the shifts, choose Cannot determine. Equilibrium Object Price Quantity True Scenario 1 False Change in Equilibrium Objects Scenario 2 Cannot determine True or False: When both the demand and supply curves shift, the curve that shifts by the lar undetermined equilibrium object. When Shift Magnitudes Are Unknown Cannot determine Decreases Increases mines the effect on the
13. How shifts in demand and supply affect equilibrium Consider the market for pens. Suppose that the number of students with an allergy to pencil erasers increases, causing more students to switch from pencils to pens in school. Moreover, the price of plastic, an important input in pen production, has dropped considerably. 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.
13. How shifts in demand and supply affect equilibrium Consider the market for pens, Suppose that the number of students who are allergic to the rubber used in pencil erasers increases, leading more students to switch from pencils to pens in school. 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. PRCE (Dolars perpen) B PRICE (Dollars perpen) 10 9 8 4 2 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 1 Scenario 1 2 Supply Scenario 2 Demand Supply Demand 7 QUANTITY (Millions of pens) B 9 Demand 10 10 Supply O ?…
1. Assume that the equilibrium price is at $3 and equilibrium quantity is at 40 units of a product. Then, imagine that suddenly any of determinants of demand, other than the price of the product, caused demand to increase while, at the same time, one of determinants of supply, other than the price of the product, caused supply to decrease. TASK: First, draw the demand and supply graph to show the original equilibrium price at $3 and equilibrium quantity at 40 units. Second pick ONE specific DETERMINANT of DEMAND and ONE specific DETERMINANT of SUPPLY Third, show in the graph what it looked like if demand increased and supply decreased (select where you think that the new price and quantity would change to), what the new equilibrium price and equilibrium quantity would be, after both changes in demand and supply occurred. Fourth, in a couple of words, write down what would be YOUR new equilibrium price and equilibrium quantity. IThat is, tell us that the original equilibrium price…
ssessment L 2.4.2 Test (CST): Microeconomics Question 5 of 20 The graph shows the supply and demand curves for a certain product, which has a current selling price of $400. The laws of supply and demand most support which conclusion about the product? Demand $500 Supply $400 $300 $200 $100 1,000 2,000 3,000 4,000 5,000 Quantity O A. The current selling price for the product is too high. O B. The current selling price for the product is the result of a surplus. O C. The current selling price for the product is too low. O D. The current selling price matches the product's equilibrium price. SUBMIT E PREVIOUS DELL Price