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In Each of the Following Situations, List What Will Happen

question 239

Essay

In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is a normal good.
a.The population increases and the price of inputs increase.
b.The price of a complement increases and technology advances.
c.The number of firms in the market increases and income increases.
d.Price is expected to increase in the future.
e.Consumer preference increases and the price of a substitute in production decreases.


Definitions:

Operations

The day-to-day activities required for a business to produce goods or services and run smoothly.

Book Value

The net value of a company’s assets as recorded on the balance sheet, calculated as total assets minus liabilities and intangible assets.

Opportunity Cost

The potential benefit that is given up when one alternative is selected over another.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as materials and labor.

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