Reference no: EM131442936
Question: Refer to the following supply and demand curve diagram.
a. Starting from an initial equilibrium at E, what shift or shifts in supply and/or demand could move the equilibrium price and quantity to each of points A through I?
b. Starting from an initial equilibrium at E, what would happen if both a decrease in the price of a substitute in production and an increase in income occurred, if it is a normal good?
c. Starting from an initial equilibrium at E, what would happen if both an increase in the price of an input and an advance in technology occurred?
d. If a price floor is imposed above the equilibrium price, which of A through I would tend to be the quantity supplied, and which would tend to be the quantity demanded? Which would be the new quantity exchanged?
e. If a price ceiling is imposed below the equilibrium price, which of A through I would tend to be the quantity supplied, and which would tend to be the quantity demanded? Which would be the new quantity exchanged?
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