1.In market equilibrium, when the price of complement in production decreases, the price in the new...

1.In market equilibrium, when the price of complement in production decreases, the price in the new equilibrium point will be........................

2. In market equilibrium, when the price of complement decreases, the new equilibrium quantity will be ……….……

3.

Expert Solution

The answers and explanation are as follows:

---

1. In market equilibrium, when the price of complement in production decreases, the price in the new equilibrium point will be higher.

If the price of a complement in production decreases, the supply of the good also decreases. Due to this, the price in the new equilibrium will be higher.

For example, petrol and diesel are complements in production of crude oil. If the market price falls, suppliers will cut down supply of crude oil. Due to adjustment, the new price will be higher than before.

------

2. In market equilibrium, when the price of complement decreases, the new equilibrium quantity will be higher.

If the price of a complement decreases, demand for the good will rise. Due to this, the new equilibrium quantity will be higher.

For example, tea and sugar are complements. If tea becomes cheaper, demand for sugar will rise. Thus, the new equilibrium quantity will be higher than before.

Rahul Sunny answered 2 years ago

Suppose the market is initially in equilibrium, and then demand decreases while supply decreases, the equilibrium...

Suppose the market is initially in equilibrium, and then demand decreases while supply decreases, the equilibrium price will _________ and the equilibrium quantity ______________ . A.) Rise; will increase B.) Rise; is ambiguous/indeterminate C.) Drop; is ambiguous/indeterminate D.) Ambiguous/indeterminate; will fall

Q7. A competitive industry is in long-run competitive equilibrium when the price of a complement good...

Q7. A competitive industry is in long-run competitive equilibrium when the price of a complement good (in consumption) decreases. What will happen in the short run to: a) The market demand curve? b) The market supply curve? c) Market price? d) Market output? e) The firm’s output? f) The firm’s profit? b. What will happen in the long run to the firm and the industry? Q8. The supply curve for an industry shows the relation between supply price and industry...

When an individual firm in a competitive market decreases its production, it is likely that the...

When an individual firm in a competitive market decreases its production, it is likely that the market price will rise. True or False? Explain

1. Graph and Identify what happens to price and quantity at the new equilibrium when the...

1. Graph and Identify what happens to price and quantity at the new equilibrium when the following occur: In your answer give an example of the determinant of demand or supply that caused the change. a change in demand with static supply - What caused the change? a change in supply with static demand. What caused the change? a decrease in supply with a smaller increase in demand. What caused the changes? an increase in supply and an increase in...

a) Discuss the effects on the equilibrium price and quantity in the software market, when the...

a) Discuss the effects on the equilibrium price and quantity in the software market, when the price of computer hardware falls. (Please write down the discussion and also show the effects in diagrams.) b) Discuss the effects on the equilibrium price and quantity in the hardware market, when the price of computer software rises. (Please write down the discussion and also show the effects in diagrams.)

1 unit increase in price in a market decreases the demand amount by 1 unit and...

1 unit increase in price in a market decreases the demand amount by 1 unit and increases supply amount by 3 units. The autonomous demand is 48 units. While the price is zero, the average supply is -4 units. a) Calculate the values of the balance points. b) In this market, 2 unit tax has been applied for each unit of the firm sold. Calculate the values of new balance points after tax.

Explain Market equilibrium, equilibrium price, and equilibrium quantity

when the market is in equilibrium

When market participants are allowed through their interactions to find the price, there will be equilibrium...

When market participants are allowed through their interactions to find the price, there will be equilibrium where the quantity supplied by buyers equals the quantity supplied by sellers. If this is the case, why might the government intervene in certain markets where externalities exist? Please give reasoning for both a positive and a negative externality. Why might the government intervene in the case where the good is a public good?

1. If a price is above the equilibrium price, explain the forces that bring the market...

1. If a price is above the equilibrium price, explain the forces that bring the market back to the equilibrium price and quantity. If a price is below the equilibrium price, explain the forces that bring the market back to the equilibrium price and quantity.

Question