Question

33. Bread and cheese are frequently eaten together. Trace the results of the following events on equilibrium prices in both markets. (10 pts each) *PLEASE DRAW DIRECTLY ON THE GRAPHS GIVEN BELOW, DO NOT DRAW YOUR OWN A. The technique for making flour is improved: P P Bread Q Checse B. What happens to equilibrium price in each market? Briefly explain why the changes you depicted in the graphs above occur. I C. The technique for curdling milk is improved: Bread Cheese Q D. What happens to equilibrium price in each market? Briefly explain why the changes you depicted in the graphs above occur.

Answer 1

classmate Date Page A . 9, 2

8 's a a
A.An improvement in technique of making flour would reduce price of flour.Flour is an inout in production of bread,so supply of bread rises reducing price and increasing quantity of bread.Bread and cheese are consumed together and a reduction in price of bread will increase demand for cheese.

Demand curve for cheese shifts to the right.

B.The supply of cheese rises with improvement in technology of cursing milk.Supply of cheese rises reducing price and increasing quantity of cheese.

Demand for bread increases as they are consumed together.