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Author Question: A decrease in the supply of steel results in a shortage of steel at the original equilibrium price. ... (Read 152 times)

Frost2351

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on: Jun 29, 2018
A decrease in the supply of steel results in a shortage of steel at the original equilibrium price. Explain how market forces will act to eliminate the shortage.
 
  What will be an ideal response?

Question 2

What is the difference between total utility and marginal utility?
 
  What will be an ideal response?


ttt030911

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The price of steel will rise. As it rises, the quantity of steel supplied will rise and the quantity of steel demanded will fall. Eventually, at the new market equilibrium price, quantity demanded will be equal to quantity supplied. The market will be in equilibrium.

Answer to Question 2

Total utility is the total amount of satisfaction obtained from the consumption of a
good or a service. Marginal utility is the additional satisfaction gained by the
consumption of one more unit of a good or service.


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Frost2351

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Reply #2 on: Jun 29, 2018
Thank you :)


ttt030911

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Reply #3 on: Jun 29, 2018
Happy to help you


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