in response to a surplus, the market price of a good will fal; as the price fall
ID: 1138723 • Letter: I
Question
in response to a surplus, the market price of a good will fal; as the price falls, the quantity demanded will increase and the quantity supplied will decrea equilibrium is reached. True False Question 29 Market equilibrium occurs where supply equals demand. True O False D Question 30 Before attempting this question... .you willl find it to be VERY helpful to use a piece of scrap paper and draw your vertical price axis, your horizontal quantity draw your demand curve and draw your supply curve. That will show you your graphical equilibrium point Now, after you have done that you can read the question below and draw movement of the curve(s) based upon the question given below... Let D- demand. S supply. P- equilibrium price and Q- equilibrium quantity. What happens in the morket for hardwood trees if the government starts restricting the amount of forest lands that can be logged? O D decreases, S no change, P and Q decrease s decreases, D no change. P increases, Q decreases O D and S decrease. P and Q increase 0 D no change, S decreases. P increases Q ncreases rchExplanation / Answer
Question 28: True
(Surplus occurs when supply exceeds demand. So, there will be downward pressure on price which will cause price to fall, demand to increase, and supply to decrease so that supply equals demand and equilibrium is reached)
Question 29: True
(Equilibrium occurs at the point where supply equals demand so that there is no shortage or surplus in the market)
Question 30: S decreases, D no chnage, P increases, Q decreases
(If the government starts restricting the amount of forest lands that can be logged then supply of hardwood trees will decrease and supply curve will shift to the left with unchnaged demand. So, equilibrium price increases and quantity decreases.)
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