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Chapter 3: 23 (page 48)
Name some factors that can cause a shift in the
demand curve in markets for goods and services.
Demand for the good and the price of commodity etc are the reason for shift in demand curve.
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Table 3.9 illustrates the market's demand and supply for cheddar cheese. Graph the data and find the equilibrium. Next, create a table showing the change in quantity demanded or quantity supplied, and a graph of the new equilibrium, in each of the following situations:
(a) The price of milk, a key input for cheese production, rises, so that the supply decreases by 80 pounds at every price.
(b) A new study says that eating cheese is good for your health, so that demand increases by 20% at every price.
| Price per pound | Qd | Qs |
|---|---|---|
| \(3.00 | 750 | 540 |
| \)3.20 | 700 | 600 |
| \(3.40 | 650 | 650 |
| \)3.60 | 620 | 700 |
| \(3.80 | 600 | 720 |
| \)4.00 | 590 | 730 |
Explain why voluntary transactions improve social
welfare.
Name some factors that can cause a shift in the supply curve in markets for goods and services.
Name some factors that can cause a shift in the demand curve in markets for goods and services.
If the price is above the equilibrium level, would you predict a surplus or a shortage? If the price is below the equilibrium level, would you predict a surplus or a shortage? Why?
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