Question

Consider the market renting U-Haul trailers for moves between Los Angeles, California, and Dallas, Texas. According to U-Haul's website (on January 29, 2018), the cost of renting a 10-foot U-Haul trailer for pickup in Los Angeles and drop-off in Dallas is $1,800. Assume that market prices are determined by the market equilibrium and that the market is initially in equilibrium. A demand curve and supply curve for U-Haul trailers for moves from California to Texas are shown below. The market equilibrium 'e.' Suppose over time Los Angeles has fewer and fewer U-Haul trailers available for moves to Dallas (because few people "return" trailers to Los Angeles by moving from Texas to California). How would this affect the market for U-Haul trailers for moves from Los Angeles to Dallas? p. S per rental S1.800

Answer 1

Question ! It is given that the number of u-Haul trailer is getting reduced over time. This will shift the supply curve to the left as the Supply had decreased. 10 O2 & Moves with U-Haul Trailers Supply curve shifts left from si to I2. Equilibrium point move from e, to e . Equilibrium price increade from 18w to P2. Equilibrium guanhty decrease from I to 62.

Question 4 The given merket is for truditioned casual dining. Some supplier of the market (like Ruby Tued day is closing their restaurants and Logan's Roadhoude Canother supplier for traditional casual dining tiled for bankruptcy and will close reftarants, All these events will effect the supply side of traditional casual dining. Since the number of restaurant is decreasing the supply will decread and it with supply curve will shift to the Price (1) per meal. : o, - O Quoghty of Resturant Real Supply shift left from S, to S. Eguilibrium price move from e, to e. Equilibrium price increase from Pito Per Eguilibom guantity decrease from co to Q2