what effect will each of the following have on the supply of auto tires?
a. a technological advance in the
methods of producing tires.
b. a decline in the number of firms in the tire industry.
c. an increase in the prices of rubber used in the production of tires.
d. the expectation that the equilibrium price of auto tires will be lower in the future than currently.
e. a decline in the price of the large tires used for semi trucks and earth-hauling rigs (with no change in the price of auto tires).
f. the levying of a per-unit tax on each auto tire sold.
g. the granting of a 50-cent-per-unit subsidy for each auto tire produced.
8. suppose the total demand for wheat and the total supply of wheat per month in the kansas city grain market are as shown in the accompanying table.
a. what is the equilibrium price? what is the equilibrium quantity? fill in the surplus-shortage column and use it to explain why your answers are correct.
b. graph the demand for wheat and the supply of wheat. be sure to label the axes of your graph correctly. label equilibrium price p and equilibrium quantity q.
c. why will $3.40 not be the equilibrium price in this market? why not $4.90? "surpluses drive prices up; shortages drive them down." do you agree?