Prblem 2

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Unformatted text preview: If, however, demand exceeds supply in any market (a shortage), the price will fall / rise / stay the same. This will lead to a fall / rise in the quantity demanded and a fall / rise in the quantity supplied. In either case the adjustment of price will ensure that demand and supply are brought into equilibrium, with any shortage or surplus being eliminated. 2. How will the market demand curve for a 'normal' good shift (i.e. left, right or no shift) in each of the following cases? (a) The price of a substitute good falls ................................................................. left / right / no shift (b) Population rises ................................................................................................ left / right / no shift (c) Tastes shift away from the good...................................................................... left / right / no shift (d) The price of a complementary good falls........................................................ left / right / no shift (e) The good becomes more expensive ......
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This note was uploaded on 09/21/2011 for the course ECONOMICS 3315 taught by Professor Glasureyong during the Fall '11 term at University of Houston-Victoria.

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