Question: Three questions please help ! 1) Assume initial equilibrium in the domestic automobile market. You hear on the news that a major technology breakthrough for
Three questions please help !
1) Assume initial equilibrium in the domestic automobile market. You hear on the news that a major technology breakthrough for producing automobiles has happened. Using supply and demand analysis answer the following.
a) Will the supply, demand, both or neither curve change or shift? Why?
b) Which direction will the curve(s) you selected move, i.e., will it (they) increase, decrease or stay the same?
c) Will the price in equilibrium price increase, decrease, stay the same or is it indeterminate (can't tell)?
d) Will the quantity in equilibrium increase, decrease, stay the same or is it indeterminate (can't tell)?
2) Assume an initial equilibrium in the gasoline car market. You hear on the news that the price of electric cars has increased. AND, at the same time, you hear on the news that the number of firms producing gasoline cars has decreased. Using supply and demand analysis answer the following.
a) Will the supply, demand, both or neither curve change or shift? Why?
b) Which direction will each curve(s) that you selected move, i.e., will it (they) increase, decrease or stay the same? Make sure you identify and the curve and direction.
c) Will the price in equilibrium, increase, decrease, stay the same or is it indeterminate (can't tell)?
d) Will the quantity in equilibrium increase, decrease, stay the same or is it indeterminate (can't tell)?
3) Assume an initial equilibrium in the domestic gasoline market. Both consumers and producers believe that gasoline prices will rise drastically in the year 2023 (the future). Using supply and demand analysis answer the following. (What will happen today?)
a) Will the supply, demand, both or neither curve change or shift? Why?
b) Which direction will each curve(s) that you selected move, i.e., will it (they) increase, decrease or stay the same? Make sure you identify and the curve and direction.
c) Will the price in equilibrium increase, decrease, stay the same or is it indeterminate (can't tell)?
d) Will the quantity in equilibrium increase, decrease, stay the same or is it indeterminate (can't tell)?
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