Use supply and demand graphs to show what will happen to equilibrium price and quantity in each
Question:
Use supply and demand graphs to show what will happen to equilibrium price and quantity in each of the following markets. Start from equilibrium and then show how the stated situation will change the market. For each market, assume there are no other changes besides the one mentioned. (ceteris paribus) Explain briefly:
a) The market for pizza. Health researchers discover that eating pizza at least once a week adds 3 years to your life expectancy and decreases the risk of dementia.
b) The market for cars. There is a shortage of computer chips. Modern cars use many computer chips so this delays product and raise the input costs for manufacturing cars.
c) The market for almonds. Bad weather in California makes the almond crop much smaller than usual. [also comment on if anyone can benefit from this situation]
d) The market for wild Salmon. Costs for fishing companies increase as new regulations make it more expensive to catch wild salmon. The price of farmed salmon falls because new technology makes it easier to farm salmon. [Note: this problem is tricky. there are two changes. In this problem I am considering the market for wild Salmon as a distinct market from the market for farmed salmon]