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MarketEquilibriumPractice - N o t e b o o k H a n d o u t 6...

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N o t e b o o k H a n d o u t 6 © Teachers’ Curriculum Institute51 Markets, Equilibrium, and PricesAnalyze the effects of each news headline about the athletic shoe market. For each event, label the axes, demand curve, and supply curve. explain the effect of the event on the demand or supply curvefor athletic shoesgraph the resulting change in equilibrium price and equilibrium quantity of athletic shoes. The first headline is completed for you. . Effect of Headlines on the Athletic Shoe Market 1Price of Rubber Increases DramaticallyBecause of an increase in the cost of inputs, the supply curve will decrease, or shift to the left. Equilibrium price increases. Equilibrium quantity decreases. 2 Movie Increases Popularity of Athletic Shoes 3Price of Sport Sandals Drops Drastically4 Government Sets Price Ceiling Below Equilibrium Price to Help Consumers Save Money 5Two New Athletic Shoe Companies Enter theMarket—Production Begins Today 6 Consumers Worry Price of Athletic Shoes May
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