Question

In the market for televisions, the price of a television falls and nothing else changes. Price (dollars per television) Show the effect of this change o os Choose between the following Use the single arrow tool to draw an arrow on the demand curve showing the direction of movement along the line OR Use the line tool to draw a new demand curve Only one of the effects is correct, and you must determine which is the appropriate one to show Quantity (millions of televisions per year)

Answer 1

1. In the market for television .As the price of television falls , quantity demanded of television would increase. This would be shown as the downward movement along the demand curve .

0 1 2 3 4 5 Quantity (millions of per week) televisions

2. Computers are a normal good. Then , if income decreases , demand for computers decreases. Therefore, demand curve for computers will shift to the left.

Brice (sellers per Compe you 390 200 ffff lee o - i 2 3 4 5 6 7 Quantity (Millions of Computers per year)

3. Market supply is the sum of individual supply at the given market price.

When P=$8, Barb supply = 3 bags of candy and Gill supply= 2 bags of candy . So, market supply= (3+2)= 5 bags.

When P=$4, Barb supply= 9 bags of candy and Gill supply = 6 bags of candy . So, market supply = (9+6)=15 bags.

By plotting this we get the market supply as shown below:

A Price (Dellersper وا Market 0 2 - 4 6 8 10 12 14 16 18 Quantity (bass per a week)

4. In the market for timber beams . As the price of timber rises, quantity supplied of timber increases, this is shown by the upward movement along the supply curve.

Brice (Dellers per been) - 1 2 3 4 5 tity (mil blems per yeer) - TVPA MÃ