Chapter 3 Supply and Demand Q. 1, 3, 5, 7, 9, 11, 13, 15
Chapter 3, Problem 1 •State whether the following pairs of goods are complement or substitutes. (If you think a pair is ambiguous in this respect, explain why.)
Chapter 3, Problem 3 •Indicate how you think each of the following would shift demand in the indicated market–
Solution to problem 3 (2) • Buyers in the market for CDs learn of an increase in the price of audiocassettes. – The demand will shift up (right) – CDs and audiocassettes are substitutes . They both can be used to record and play music or soundtrack. – If price of audiocassettes increases, people will probably switch to CDs • Buyers in the market for CDs learn of an increase in the price of CDs – As price of CDs goes up, people will buy less – But the demand curve will not shift- why? • Change in Quantity Demanded versus Change in Demand
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- Spring '10
- Supply And Demand