GRAPHS!!! Can someone show me what the graphs look like for each of these events
ID: 1094065 • Letter: G
Question
GRAPHS!!! Can someone show me what the graphs look like for each of these events? With the axis labelled. Thanks!
Identify changes in market conditions and their effect on equilibrium price and quantity for the following events:
Event 1: The wages for all dental assistants increase, increasing the costs of inputs.
Event 2: The government provides national dental insurance benefits for all U.S. citizens that cover 100% of the cost of all dental services. There are two effects of this policy. First, there will be an increase in the number of consumers of dental services. Second, there will be fewer dentists willing to provide dental services, resulting in some dentists removing themselves from the market entirely.
Explanation / Answer
Event 1: The wages for all dental assistants increase, increasing the costs of inputs.
cost of inputs goes up, this reduces supply (leftward shift)
more customers, an increase in demand (rightward shift)
less firms, a decrease in supply (leftward shift)
I don't know how many of these you are considering simultaneously so refer to the cheat sheet below for help.
event 2
..Input costs are the costs firms must pay in order for them to be able to present a product to a market. These can include land, capital and labour. If the supply is represented by an upward sloping curve on a supply-demand graph, input costs will influence how far to the left or right the entire curve will shift. This means that the cost of inputs will dictate the prices at which firms will be willing to sell different quantities of their product.
Should input costs increase, firms will want to supply less of each product at each price, so the entire curve shifts to the left. Should input costs decrease (a decrease in wage rates, for example) then the firm will be able to offer more of each product at each price, and so the entire supply curve will shift to the right.
Source:
http://www.freeeconhelp.com/2011/10/what...
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.