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Answer the next question based on the following demand and supply model for a business firm producing motorcycles. Assume that 300 motorcycles is the optimal and most profitable level of production for the firm. All dollars are in thousands.

(a) What are the equilibrium price and quantity at the medium level of demand (DM)?

(b) What will be the equilibrium price and quantity if there is a demand shock that unexpectedly lowers demand (DL)?

(c) What will be the equilibrium price and quantity if there is a demand shock that unexpectedly increases demand (DH)?

(d) What can you conclude will happen to prices and output when this model is shocked by changes in demand?




and financial investment? Give an example f Q = 300 Motemycle ving demand and supply model for a business firm optimal and mo
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Ques: RANKA to Dm 300 Motorcycle Equilibrium Pecice and Quantity is determined at a point whose Quantity Demonded = Quantity Sappli e of Demand line Increases, the new equilibrium Price is 30 and equilibrium Oty is 30. We conclude that as Demand changes the

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