Economics Maths Questions iii

2008-06-26 10:11 am
With the help of the demand and supply diagram(s)in the orange market, what
will happen to the equilibrium price and quantity of orange in each of the
following cases? You should state whether demand or supply(or both) have
shifted and in which direction. (In each case assume ceteris paribus)

(a) A fall in the price of other fruits.
(b) A rise in the demand for orange juice.
(c) Consumers expect the price of orange to fall in next week.
(d) The good weather favorable in massive production of orange and at the
same time, consumers feel that it is healthy to eat more orange.

回答 (1)

2008-06-26 8:46 pm
✔ 最佳答案
a) http://i238.photobucket.com/albums/ff245/chocolate328154/Eco002.jpg
A fall in the price of other fruits causes the demand for oranges to drop from D to D1 as oranges and other fruits are of competitive demand.
Both equilibrium price ( P to P1 ) and quantity ( Q to Q1 ) drop.
b) http://i238.photobucket.com/albums/ff245/chocolate328154/Econ006-1.jpg
A rise in demand for orange juice increases the demand for oranges from D to D1, as they are of derived demand.
Both equilibrium price ( P to P1 ) and quantity ( Q to Q1 ) rise.
c) http://i238.photobucket.com/albums/ff245/chocolate328154/Eco002.jpg
When consumers expect the price of orange to fall next week, the demand for oranges decreases from D to D1, as they postpone their purchases.
Both equilibrium price ( P to P1 ) and quantity ( Q to Q1 ) drop.
d) This will cause both increase in demand and supply. However, as the magnitude of increase is uncertain, there are 3 possibilities:
1) If demand increases more than supply, both equilibrium price and quantity rise.
2) If demand increases the same as supply, equilibrium price remains unchanged while the quantity increases.
3) If demand increases less than supply, equilibrium price drops while the quantity increases.
參考: My Econ Knowledge


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