The application of the supply-and-demand model. The objective of this activity is to enhance your understanding about the supply-and-demand model. 

Option 1: Every summer, when peaches are in season, the price of peaches is very low. However, the beach house rental price is very high in summer. Please apply the three-step approach to explain why the price of peaches is low and the price of beach house rental is high, respectively. Graphs are optional, but recommended. ? 

Option 2: Why are prices of eggs so high? Please pick ONLY one reason and apply the three-step approach to explain why the price is so high. You are welcome to watch this video (https://www.youtube.com/watch?v=WAwEXycDhzY) or do your own research. Graphs are optional, but recommended. Review:

Transcribed Image Text:

Review: 4. MARKET EQUILIBRIUM Analyzing Changes in Equilibrium: Three Steps When analyzing how the event affects the equilibrium in a market, we proceed in three steps. 1. Decide whether this event shifts the supply or demand curve. 2. Decide in which direction the curve shifts. 3. Use the supply-and-demand model to see how the shift changes the equilibrium price and quantity (i.e., to figure out the new market equilibrium). Review: 4. MARKET EQUILIBRIUM Analyzing Changes in Equilibrium: Three Steps When analyzing how the event affects the equilibrium in a market, we proceed in three steps. 1. Decide whether this event shifts the supply or demand curve. 2. Decide in which direction the curve shifts. 3. Use the supply-and-demand model to see how the shift changes the equilibrium price and quantity (i.e., to figure out the new market equilibrium).