Problem
We know that simultaneous shifts in demand and supply can leave us with uncertainty about the impact on price or quantity. an increase in both demand and supply will increase equilibrium quantity but have an ambiguous effect on equilibrium price. however, if we knew that there was a significant increase in demand and only a small increase in supply, we could conclude that the price would probably rise overall, albeit not bus as much as would have been the case of supply had not increased slightly.
In each of the following examples, there are a major event and a minor event. determine whether each change relates to demand or to supply, and then figure out the impact on price and quantity; be sure to say something about the relative magnitudes of the price and quantity changes.
a. market: rock salt major event: a bitterly cold and unusually snowy winter season has significantly depleted the mount of available rock salt.
minor event: there is another snow storm, and roads and sidewalks need to be salted
b. market: smartphones
major event: the proliferation of fast reliable affordable or free wifi and cellular signals increases the usability of smartphones.
minor event: the production of smartphones is marked by modest technological advances
c. canned tomatoes:
major event: a large canned tomato manufacturer begins to use cheap imported tomatoes from Mexico rather than domestic tomatoes.
minor event: this causes a public relations fiasco, resiling in an organized effort to boycott canned tomatoes.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.