In: Economics
3. Refer to the accompanying graph.
Price |
Quantity of I-phones (Income = 20,000) |
Quantity of I-phones (Income = 30,000) |
$350 |
250 |
375 |
$450 |
200 |
325 |
$550 |
150 |
275 |
$650 |
100 |
225 |
$750 |
50 |
175 |
4.
(a) Do you expect the supply curve of diamonds is steep or quite flat? Explain.
(b) With better technology of finding diamonds, how will the price elasticity of supply of diamonds change? Show your answers in a graph.