Author Question: For each of the following changes, show the effect on the supply curve and state what will happen to ... (Read 60 times)

crobinson2013 · **on:** Jul 1, 2018

For each of the following changes, show the effect on the supply curve and state what will happen to market equilibrium price and quantity in the short run.

a. The government requires pollution control filters that raise costs on goods.
b. Wages of workers in this industry fall.
c. There is an improvement in technology.
d. The price of the good falls.
e. Producers expect that the price of the good will fall in the future.

Question 2

One reason that it might be difficult for a player to determine his best strategy is that

A) he might have limited ability to calculate the possible outcomes.
B) he is irrational.
C) there is no pure strategy.
D) there are multiple Nash equilibria.

anyusername12131 · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

a. Supply decreases; equilibrium price rises and quantity falls.
b. Supply increases; equilibrium price falls and quantity rises.
c. Supply increases; equilibrium price falls and quantity rises.
d. This is a movement along the supply curve, and the quantity supplied will decrease.
e. Supply increases (now); equilibrium price falls and quantity rises.

Answer to Question 2

A