(2 points) Moving Equilibrium. Show the effect of each on the monopoly market eq

Question

(2 points) Moving Equilibrium. Show the effect of each on the monopoly market equilibrium; you don’t need to have exact answers but explain the direction of change in the demand and/or marginal cost curves.

(0.5 points) The price of pecans rises.

(0.5 points) There is great weather in Georgia and pecans are in abundant supply at lower prices.

(0.5 points) Taylor loses her good pastry chef. The new chef is hired at the same wage but pie quality is off.

(0.5 points) A local restaurant reviewer praises the quality of her pie.

Explanation / Answer

1. The demand curve will stay the same. The marginal cost would go up.

2. The marginal cost curve will shift inwards because there’s a surplus of pecans

3. The demand will shift inwards or down because people don’t want bad quality pie.

4. The demand will shift outwards or up because people want high quality pie.

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.