p Justin Timberlake Rod 4; ×Homework (Ch 04): Hom ×yaMndlap. Cengage Lean X -) l
ID: 1133580 • Letter: P
Question
p Justin Timberlake Rod 4; ×Homework (Ch 04): Hom ×yaMndlap. Cengage Lean X -) l í. Secure l http://ng ?deploymentld-56736686240225282540414358elSBN 978133709 MINDTAP Homework (Ch 04) Back to Assignment Attempts: 07 23ee the Highest: 2.3/4 13. How shifts in demand and supply aflect equilibrium 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 production, has dropped considerably. On the following graph, labeled Scenario i, indicate the efflect these two events have on the demand for and supply of pens. Scenario 1 Demand Supply
Explanation / Answer
1. Demand curve for pens shifts out as demand increases as consumers switch to pens from pencils. As price of plastic, a raw material, decreases, the price of pens decreases, the supply curve shifts inwards, as a larger number of pens can be manufactured at a lower price. The demand then shifts along the demand curve as the demand is changing only due to the price.
Initial (Price, Quantity) (5,5)
Scenario 1 - Demand curve shifts out; the shift is parallel; therefore a proportionate change in price occurs, as demad shifts
Slope of the demand curve = -1
The exact value cannot be determined unless one knows the quantity demanded value after the shift.
Scenario 2
Movement along the demand curve, as price of the pens decreases; this is after an inward shift in the supply curve.
Price & Quantity can be known without knowing the magnitudes of the shift - False
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.