MyQuestionIcon

1

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Effects of an Autonomous Change on Equilibrium Demand in the Product Market

Assume X is a...

Question

Assume X is a normal good. Holding everything else constant, assume that income rises and the price of a factor of production also increases. What point in Figure is most likely to be the new equilibrium price and quantity?

A

Point 9

No worries! We‘ve got your back. Try BYJU‘S free classes today!

B

Point 5

No worries! We‘ve got your back. Try BYJU‘S free classes today!

C

Point 3

No worries! We‘ve got your back. Try BYJU‘S free classes today!

D

Point 2

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is D Point 2
Point 2.
As there is increase in income the demand it implies that the demand will increase from D1 to D2 i.e., towards right and because the price of factors of production have increases there will be decrease in supply and it will move towards the left from S1 to S3. The point of equilibrium for cure D2 and S3 is Point 2 being the new equilibrium point.

Suggest Corrections

thumbs-up

0

Similar questions

Q. Assume that consumers expect the prices on new cars to significantly increase next year. What point in above figure is most likely to be the new equilibrium price and quantity?

Q. Questions are based on the demand and supply diagrams in Figure

D_{1}

S_{1}

are the original demand and supply curves

D_{2}, D_{3}, S_{2}

S_{3}

are possible new demand and supply curves. Starting from initial co librium point (1) what point on the graph most likely to result from each change?

\to

Assume that consumer income has increased. Given that Y is an inferior good, which point in Figure is most likely to be the new equilibrium price and quantity?

Q. We are analyzing the market for good Z. The price of a complement good, good Y, declines. At the same time, there is a technological advance in the production of good Z. Which point in figure is most likely to be the new equilibrium price and quantity?

Q. Questions are based on the demand and supply diagrams in Figure

D_{1}

S_{1}

are the original demand and supply curves

D_{2}, D_{3}, S_{2}

S_{3}

are possible new demand and supply curves. Starting from initial co librium point (1) what point on the graph most likely to result from each change?

\to

Assume that the government has just removed the 10% excise duty on good X. What point in Figure 1 is most likely to be the new equilibrium price and quantity?

Q. Questions are based on the demand and supply diagrams in Figure

D_{1}

S_{1}

are the original demand and supply curves

D_{2}, D_{3}, S_{2}

S_{3}

are possible new demand and supply curves. Starting from initial co librium point (1) what point on the graph most likely to result from each change?

\to

A government research agency has published outcome of studies which say that consumption of good X could cause cancer. In addition, assume that a powerful lot has persuaded the government to give subsidy to the manufacturers of good X. what point in Figure is most likely to be the new equilibrium price and quantity?

View More

Join BYJU'S Learning Program

similar_icon

Related Videos

lock

Effects of an Autonomous Change on Equilibrium Demand in the Product Market

ECONOMICS

Watch in App

explore_more_icon

Explore more

Effects of an Autonomous Change on Equilibrium Demand in the Product Market

Standard XII Economics

Join BYJU'S Learning Program

CrossIcon