Chapter 1 – Case Problem Set D
17. Use the graph that follows to plot a demand curve and a supply curve. Label them
D0 and S0. Identify the equilibrium price and quantity and label them P0 and Q0.
Now plot a second demand curve that is parallel to the first and that represents an
increase in demand and label it D1. Identify the new equilibrium price and
quantity and label them P1 and Q1. What has happened to price and quantity as a
result of the change in demand? Finally, draw two new supply curves, parallel to
the first supply curve. Draw the first one so that the equilibrium price defined by
the new supply curve and demand curve D1 is equal to P0. Label the first new
supply curve SP. Draw the second supply curve so that the equilibrium quantity
defined by the new supply curve and demand curve D1 is equal to Q0. Label the
second new supply curve SQ. Explain the general implications of this exercise by
answering the following question: what happens to equilibrium price and quantity
if a demand increase is accompanied by a change in supply?
12
10
8
Price
0
0 2 4 6 8 10 12
Quantity
Managerial Economics: Principles and Worldwide Applications, 8e
18. Use the graph that follows to plot a demand curve and a supply curve. Label them
D0 and S0. Identify the equilibrium price and quantity and label them P0 and Q0.
Now plot a second demand curve that is parallel to the first and that represents a
decrease in demand and label it D1. Identify the new equilibrium price and
quantity and label them P1 and Q1. What has happened to price and quantity as a
result of the change in demand? Finally, draw two new supply curves, parallel to
the first supply curve. Draw the first one so that the equilibrium price defined by
the new supply curve and demand curve D1 is equal to P0. Label the first new
supply curve SP. Draw the second supply curve so that the equilibrium quantity
defined by the new supply curve and demand curve D1 is equal to Q0. Label the
second new supply curve SQ. Explain the general implications of this exercise by
answering the following question: what happens to equilibrium price and quantity
if a demand decrease is accompanied by a change in supply?
12
10
8
Price
0
0 2 4 6 8 10 12
Quantity
Managerial Economics: Principles and Worldwide Applications, 8e
19. Use the graph that follows to plot a demand curve and a supply curve. Label them
D0 and S0. Identify the equilibrium price and quantity and label them P0 and Q0.
Now plot a second supply curve that is parallel to the first and that represents an
increase in supply and label it S1. Identify the new equilibrium price and quantity
and label them P1 and Q1. What has happened to price and quantity as a result of
the change in supply? Finally, draw two new demand curves, parallel to the first
demand curve. Draw the first one so that the equilibrium price defined by the new
demand curve and supply curve S1 is equal to P0. Label the first new demand
curve DP. Draw the second demand curve so that the equilibrium quantity defined
by the new demand curve and supply curve S1 is equal to Q0. Label the second
new demand curve DQ. Explain the general implications of this exercise by
answering the following question: what happens to equilibrium price and quantity
if a supply increase is accompanied by a change in demand?
12
10
8
Price
0
0 2 4 6 8 10 12
Quantity
Managerial Economics: Principles and Worldwide Applications, 8e
20. Use the graph that follows to plot a demand curve and a supply curve. Label them
D0 and S0. Identify the equilibrium price and quantity and label them P0 and Q0.
Now plot a second supply curve that is parallel to the first and that represents a
decrease in supply and label it S1. Identify the new equilibrium price and
quantity and label them P1 and Q1. What has happened to price and quantity as a
result of the change in supply? Finally, draw two new demand curves, parallel to
the first demand curve. Draw the first one so that the equilibrium price defined by
the new demand curve and supply curve S1 is equal to P0. Label the first new
demand curve DP. Draw the second demand curve so that the equilibrium quantity
defined by the new demand curve and supply curve S1 is equal to Q0. Label the
second new demand for DQ. Explain the general implications of this exercise by
answering the following question: what happens to equilibrium price and quantity
if a supply decrease is accompanied by a change in demand.
12
10
8
Price
0
0 2 4 6 8 10 12
Quantity
Managerial Economics: Principles and Worldwide Applications, 8e
