Suppose There Is a Linear Downward-Sloping Demand Curve and a Linear

question 118

Essay

Suppose there is a linear downward-sloping demand curve and a linear upward-sloping supply curve for a good.The price of a substitute good increases and the price of an input to production also increases.Graph the original demand and supply curves,and the curves after the substitute good and input prices increase.How will the equilibrium price change after the substitute and input prices increase?

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Definitions:

Product

The result of multiplying two or more numbers together or the substances formed at the end of a chemical reaction.

Concentration

The measure of the amount of a sub-component (especially solute) in a solution, denoting how much of a substance is contained in a certain amount of another substance.

Shift

In a general sense, it refers to a change or movement from one position, state, or direction to another.

Equilibrium Constant

A number that expresses the ratio of products to reactants at equilibrium for a chemical reaction, indicating the extent of the reaction.