Question: Consider Figure 4-1. The current demand and supply curves are D1 and S1, at which the equilibrium price and quantity are P1 and Q1. If
Consider Figure 4-1. The current demand and supply curves are D1 and S1, at which the equilibrium price and quantity are P1 and Q1. If there is a decrease in the price of an item that consumers regard as a substitute for this good, which curve shifts, and in which direction does it shift? What happens to the market clearing price and to the equilibrium quantity?
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