For each of the following changes, show the effect on the supply curve and state what will happen to market equilibrium price and quantity in the short run
a. The government requires pollution control filters that raise costs on goods.
b. Wages of workers in this industry fall.
c. There is an improvement in technology.
d. The price of the good falls.
e. Producers expect that the price of the good will fall in the future.
a. Supply decreases; equilibrium price rises and quantity falls.
b. Supply increases; equilibrium price falls and quantity rises.
c. Supply increases; equilibrium price falls and quantity rises.
d. This is a movement along the supply curve, and the quantity supplied will decrease.
e. Supply increases (now); equilibrium price falls and quantity rises.
You might also like to view...
Suppose you withdraw $1,000 in cash from your checking account. Draw a T-account to show the effect of this transaction on your bank's balance sheet
What will be an ideal response?
Limited liability can best be defined as the legal provision that
A) shields owners of a corporation from losing more than what they invested in a firm. B) protects bond holders from being sued by other creditors. C) gives holders of preferred stock priority over holders of common stock. D) reduces the exposure of sole proprietorships to law suits.