Question: 1. A major technological improvement leads to a large decrease in the cost of production. Draw a new supply curve S2, to reflect this change. Then state the new equilibrium price and quantity.
2. (a) Draw a new demand curve, D2, which illustrates a decrease in demand.
(b). State what happens to equilibrium price and quantity.
3. Show an increase in demand and a decrease in supply.
(a) Label each of the curves (S1, S2, D1 and D2).
(b) State the original equilibrium price and quantity.
(c) State the new equilibrium price and quantity.
4. The entire orange crop in Florida is affected by a freeze. On the graph show how demand and supply are affected and show the new equilibrium price and quantity for a bushel of oranges.
5. As price rises, quantity supply will ____________ accroding to the Law of Demand.
6. An increase in supply is show graphically by a shift of the supply curve to the _____________.
Information related to above question is enclosed below:
Attachment:- M2_problem_sets_1.rar