EconHW2 - 70 cents-per-pack c The quantity demanded has...

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Microeconomics 111 February 10, 2008 Homework 2 6. a) The supply of pizzas have significantly decreased, creating a shortage in the number of pizzas available on the market, driving up the price to compensate for the increased marginal benefit. b) The supply of pizzas has increased, creating an abundance of pizzas on the market. The price drops in order to compensate for the decreased marginal benefit. 7. a) b) Supply has decreased, increasing the quantity demanded and pushing the price up to
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Unformatted text preview: 70 cents-per-pack. c) The quantity demanded has decreased, creating an overabundance of gum which drives the price down to 30 cents-per-pack. d) If supply is reduced by 40 million packs a week, the price of gum will increase and the amount demanded will fall. e) If supply is reduced by 40 million packs a week and simultaneously the amount demanded increases by 40 million pack a week, the equilibrium quantity remains the same but price increases....
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This note was uploaded on 04/06/2008 for the course ECON 111 taught by Professor Farrant during the Spring '08 term at Dickinson.

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