Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 3 - Demand, Supply, and Market Equilibrium - Appendix - Review Questions - Page 81: 1

Answer

(a) The equilibrium prices will rise. (b) The prices will decrease and supply will increase.

Work Step by Step

(a) The equilibrium prices increase because the demand curve will shift rightward while the supply curve shifts leftward. (b) The prices decrease, and as a result demand decreases because the demand for substitutes increases. The supply will increase due to optimum weather conditions.
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