Chapter 3: Q.26 (page 78)
What causes a movement along the demand curve?
What causes a movement along the supply curve?
Short Answer
A change in the price of the product causes a movement along the demand and supply curve.
Chapter 3: Q.26 (page 78)
What causes a movement along the demand curve?
What causes a movement along the supply curve?
A change in the price of the product causes a movement along the demand and supply curve.
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We know that a change in the price of a product
causes a movement along the demand curve. Suppose consumers believe that prices will be rising in the future. How will that affect demand for the product in the present? Can you show this graphically?
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What is total surplus? How is it illustrated on a
demand and supply diagram?
In an analysis of the market for paint, an economist discovers the facts listed below. State whether each of these changes will affect supply or demand, and in what direction.
a. There have recently been some important cost-saving inventions in the technology for making paint.
b. Paint is lasting longer, so that property owners need not repaint as often.
c. Because of severe hailstorms, many people need to repaint now.
d. The hailstorms damaged several factories that make paint, forcing them to close down for several months.
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