Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 3: Q. 3.20 (page 74)

In Fig 3-9, the current position of the supply curve is S1, and the price of a portable power bank is $3. If the suppliers anticipate a higher price of portable power banks in the future, will the supply curve shift to S2 or to S3? What is the change in the amount of portable power banks supplied?

Short Answer

Expert verified

S2

Increases by 3 units.

Step by step solution

01

Step1. Introduction 

Supply schedule or the supply function is the representation of individual as well as combined supply of portable power bank.

Law of supply establishes a direct relationship between prices and the quantity supplied.

02

Step2. Explanation

Since, the suppliers are anticipating a higher price in future, they would increase their production and supply of power banks in the market. This shifts the supply curve to S2 to the right.

The change in supply is from 6 units to 9 units, i.e. an increase of 3 units.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Understand how the interaction of demand

and supply determines the equilibrium

price and quantity

If the price of flash memory chips used in manufacturing smartphones decreases, what will happen in the market for smartphones? How will the equilibrium price and equilibrium quantity of smartphones change?

In fig 3-7, what are the effects of a price decrease from \(5 per portable power bank to \)3 per portable power bank on the quantities supplied by supplier 1 and by supplier 2 individually and combined?

Explain the law of demand

Has the market supply curve in China shifted rightward or leftward?Explain
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free