Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. 13. How shifts in demand and supply affect equilibriumConsider 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 backto its original position, just drag it a little farther.PRICE (Dollars per pen)1098210+0 12Scenario 1SupplyDemand34 5 67QUANTITY (Millions of pens)8910DemandSupplyNext, 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. 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)108210012Equilibrium ObjectPriceQuantityO TrueScenario 2O FalseSupplyDemand3 47QUANTITY (Millions of pens)Scenario 189Compare 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.10Use 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.DemandSupplyChange in Equilibrium ObjectsScenario 2True 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.When Shift Magnitudes Are Unknown

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

ext, 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 raph. PRICE (Dollars per pen) 10 8 7 2 1 0 0 1 2 Equilibrium Object Price Quantity 4 Scenario 2 O True O False Supply Demand QUANTITY (Millions of pens) Scenario 1 8 ompare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them that asn't apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens. 9 10 se the results of your answers on both the Scenario 1 and Scenario 2 graphs to complete the following table. Begin by indicating the overall change the equilibrium price and quantity after the shift in demand or supply for each shift-magnitude scenario. Then, in the final column, indicate the sulting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If you annot determine the answer without knowing the magnitude of the shifts, choose Cannot determine. Demand Supply Change in Equilibrium Objects Scenario 2 When Shift Magnitudes Are Unknown ue or False: When both the demand and supply curves shift, the curve that shifts by the smaller magnitude determines the effect on the determined equilibrium object.

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 25P