Question

1. Consumers make less money income now, What happens demand of TV's today? What happens to supply? What happens to equilibrium price? What happens to equilibrium quantity?

2. Consumers expect to make less money income in the future, What happens to demand for TV's today? What happens to supply? what happens to equilibrium price? what happens to equilibrium quantity?

3. In the market for TV's in the present period, if the price of plastic used to make TV's increases, what happens to demand? what happens to supply? what happens to equilibrium price? what happens to equilibrium quantity?

4. In the market for TV's, what happens to demand when the price of a TV increases? what happens to supply? what happens to equilibrium price? what happens to equilibrium quantiy?

5. what happens to demand in the present periods for TV's if the price of a radio decreases? what happens to supply? what happens to equilibrium price? what happens to equilibrium quantity?

6. what hapsns to demand in the present period for TV's if consumers and producers expect the price of a TV to increase in the next period? what happens to supply? what happens to equilibrium price? what happens to equilibrium quantit?

Answer 1

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Question:

Answer:

Law of Demand:

It is a macroeconomic concept that refers that price and quantity demand have reverse relation. Price and quantity demand move together in opposite direction. When price increase quantity demand decrease and vice-versa.

Law of Supply:

It is a macroeconomic concept that refers the relationship between price and quantity supply. Price and quantity supply move together in similar direction. When price increase quantity supply increase and vice-versa.

Elasticity of Demand:

It is a macroeconomic concept that refers about the change in demand because of change in economic variables like, Income, price etc. When income increase, demand also increase and vice-versa.

1). Answer:

When the income of consumer decrease or consumers make less money income then it will decrease the demand for TV. Supply will not change immediately. Normally, when demand decrease, price also decrease and that decrease price level. Here equilibrium price and equilibrium quantity both will reduced or decreased from previous level.

2). Answer:

Consumers expect to make less money income in the future so it will decreased the consumer confidence level that will decreased quantity demand for TV. It will also reduce the quantity supply. Here equilibrium quantity demand will reduced but equilibrium price level will be constant. Price will not change.

3). Answer:

In the market for TV's in the present period and the price of plastic used to make TV's increases then it will decreased price level and increasing price level will reduce quantity demand. Because increasing price of plastic will increased the input cost that will also reduce supply also. Here equilibrium quantity demand will reduced but equilibrium price level will be constant. Price will not change.

4). Answer:

When the price of a TV increases then it will decrease the demand for TV. Here increasing price will increased the supply level but decreasing demand will reduced the equilibrium price level and and equilibrium quantity will remain same.

5). Answer:

TV and radio are substitute but not a close substitute in current era. If the price of a radio decreases then it will slightly affect the demand for TV. But it will not change supply level for TV. Here equilibrium price and equilibrium quantity both will reduced or decreased from previous level.

6). Answer:

If consumers and producers expect the price of a TV to increase in the next period then it will increased the demand. But in current period supply level will not change. Here equilibrium price and equilibrium quantity both will increased from previous level.

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