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The supply of aluminum in the United States depends on the price of aluminum and the average price of electricity

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The supply of aluminum in the United States depends on the price of aluminum and the average price of electricity (a critical input in the production of aluminum). Assume that an increase in the price of electricity shifts the supply curve for aluminum to the left (i.e., a higher average price of electricity decreases the supply of aluminum). The demand for aluminum in the United States depends on the price of aluminum and income shifts the demand curve for aluminum to the right (i.e., higher income increases the demand for aluminum). In 2004, national income in the United States increased, while the price of electricity fell, as compared to 2003. How would the equilibrium price of aluminum in 2004 compare to the equilibrium price in 2003? How would the equilibrium quantity in 2004 compare to the equilibrium quantity in 2003?

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Related Book For  answer-question
Microeconomics

Microeconomics

ISBN: 978-0073375854

2nd edition

Authors: Douglas Bernheim, Michael Whinston

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Question Posted: March 17, 2016 04:45:06
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