Explore BrainMass
Share

Explore BrainMass

    Supply and demand questions

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    1.
    Can you illustrate by using supply and demand graphs what happens to the equilibrium price and quantity in each of the following situations. Please dont forget to label the graphs.
    a. A rise in the price of tea on the market for coffee.
    b.Expectations of higher prices on the market for housing.
    c.A decline in the price of gas on the market for small cars.

    2.
    If we suppose that the market price for cigarettes is $2.00. A tax of 20 cents per package is imposed.The consumer pays 15 cents of the tax and the producer pays 5 cents of the tax Could you illustarte this with a supply/demand graph?

    3.
    If the current market rent for a one bedroom apartment in Vancouver is $500.00. An increase in demand will increase market rents to $600.00. The provincial goverment intervenes to control rents at $ 500.00. Can you illustarte this situation with a supply/demand graph.

    Thank you!

    © BrainMass Inc. brainmass.com October 9, 2019, 4:30 pm ad1c9bdddf
    https://brainmass.com/economics/general-equilibrium/supply-demand-questions-34466

    Solution Preview

    1. Can you illustrate by using supply and demand graphs what happens to the equilibrium price and quantity in each of the following situations. Please dont forget to label the graphs.
    a. A rise in the price of tea on the market for coffee.
    In this case, tea is a substitute for coffee so if the price of tea increases, some people will switch from tea to coffee, so more people will buy coffee. This will shift coffee demand out.

    b.Expectations of higher prices on the market for housing.
    I'm not sure ...

    Solution Summary

    Supply and demand questions are answered.

    $2.19