Question

If the demand curve is parallel to X axis and supply remain same what is the change in equilibrium price and quantity ??????????????


plz answer this as fast as possible ...and draw a diagram if possible ............

Answer 1

Let's start thinking about changes in equilibrium price and quantity by imagining a single event has happened. It might be an event that affects demand—like a change in income, population, tastes, prices of substitutes or complements, or expectations about future prices. Or, it might be an event that affects supply—like a change in natural conditions, input prices, technology, or government policies that affect production.

How do we know how an economic event will affect equilibrium price and quantity? Luckily, there's a four-step process that can help us figure it out!

Step 1. Draw a demand and supply model representing the situation before the economic event took place.

Establishing this model requires four standard pieces of information:

The law of demand, which tells us the slope of the demand curve

The law of supply, which gives us the slope of the supply curve

The shift variables for demand

The shift variables for supply.

Answer 2

answer:-

Step 1. Draw a demand and supply model representing the situation before the economic event took place.

Establishing this model requires four standard pieces of information:

• The law of demand, which tells us the slope of the demand curve

• The law of supply, which gives us the slope of the supply curve

• The shift variables for demand

• The shift variables for supply.

• Once you create your demand and supply model, you can use it to find the initial equilibrium values for price and quantity.

Step 2. Decide whether the economic event being analyzed affects demand or supply.

Step 3. Decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram.

Step 4. Identify the new equilibrium

and then compare the original

equilibrium price and quantity to

the new equilibrium price and

quantity.

the effect on equilibrium price and equilibrium quantity:

I) Change in Demand when Supply is Perfectly Elastic

(II) Change in Supply when Demand is Perfectly Elastic

(III) Change in Demand when Supply is Perfectly Inelastic

(IV) Change in Supply when Demand is Perfectly Inelastic