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Chapter 3: Q.14 (page 78)

Will demand curves have the same exact shape in

all markets? If not, how will they differ?

Short Answer

Expert verified

Demand curves have different shapes depending upon the type of market.

Step by step solution

01

Step 1.Demand curves shapes vary from market to market.

For perfect competition, the market demand curve is a horizontal line that indicates prices are the same for every unit sold.

02

Step 2.monopoly firm 

The demand curve for a monopoly firm is the market demand curve(downward sloping) that shows, a firm can sell more output by lowering the price.

03

Step 3.monopolistic competition 

The demand curve shape for the monopolistic competition is downward sloping which shows, a monopolistic competitor, can gain more buyers by decreasing its price and without losing all of its buyers can increase the price of its goods

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Most popular questions from this chapter

Use the four-step process to analyze the impact

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Table 3.10 shows the supply and demand for movie tickets in a city. Graph demand and supply and identify the equilibrium. Then calculate in a table and graph the effect of the following two changes.

(a) Three new nightclubs open. They offer decent bands and have no cover charge, but make their money by selling food and drink. As a result, demand for movie tickets falls by six units at every price.

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\(5.002616
\)6.002418
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Many changes are affecting the market for oil. Predict how each of the following events will affect the equilibrium price and quantity in the market for oil. In each case, state how the event will affect the supply and demand diagram. Create a sketch of the diagram if necessary.

a. Cars are becoming more fuel efficient, and therefore get more miles to the gallon.

b. The winter is exceptionally cold.

c. A major discovery of new oil is made off the coast of Norway.

d. The economies of some major oil-using nations, like Japan, slow down.

e. A war in the Middle East disrupts oil-pumping schedules.

f. Landlords install additional insulation in buildings.

g. The price of solar energy falls dramatically.

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