4.2. COMPARATIVE STATICS: ASPARTAME, OIL. For each of the following, use a supply and demand diagram...

4.2. COMPARATIVE STATICS: ASPARTAME, OIL. For each of the following, use a supply and

demand diagram to deduce the impact of the event on the stated market. Would you

expect the impact to be primarily on price or quantity? Feel free to mention issues that

you don't think are captured by a traditional supply and demand analysis.

(a) Event: The FDA announces that aspartame may cause cancer. Market:

Saccharin. (Note: aspartame and saccharin are low-calorie sweeteners.)

(b) Event: Oil price increases. Market: California electricity .

Expert Solution

Rahul Sunny answered 1 year ago

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