Question

Briefly describe what would likely happen to the supply and demand of each good if the event noted occurred.  What would be the likely effect on the price and quantity in each case? a)  lobster:        News reports that toxins have been found in shellfish.

           b)  Exercise Equipment:   A link is discovered between lack of exercise and several forms of cancer

1.            c)  Haddock:       New government regulations dramatically decreases the number of haddock that fisherman are allowed to catch.

Answer 1

(a) .

when the toxins found in the helfish news is circulated in public media then there will be highdecreased in the consumption of the shelfish which means that the demands of the shellfish will decreases and also becoz the demand decreased the demand curve will shift towards left and this will cause the price of the shelfish to decreases and also the quantity demand will decreases.

(B).In this event , as the link is discovered most of the people will get aware about exercises and the demand and supply of the exercise equipment , gym will increases as their consumption will increases .So, the demand curve will shift towards right and supply curve will shift left.Thu the price will increases and the quantity demanded will also increases .

(C).In this event , the effect on the supply and demand will be that the supply will be same but the demand will increases a restriction by govt. , more people will need it .So , the price will increase and the quantity demanded will also increases.

Have a good day !