Show graphically how the effects of an increase in supply

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Assume a typical PRODUCT market. Show graphically how the effects of an increase in supply will differ according to the elasticities of supply and demand.

a) Illustrate the following combinations:

i) An elastic supply and an elastic demand

ii) An inelastic supply and an inelastic demand

iii) An elastic supply and an inelastic demand

iv) An inelastic supply and an elastic demand

b) If you were a farmer (i.e. if the above market were for farm products) whichof the four combinations would you prefer and why?

Reference no: EM13152445

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