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What are the effects on the equilibrium price and quantity of steel if the wages of steelworkers
rise and, simultaneously, the price of aluminum rises?
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Video Transcript
What are the effects on the equilibrium price and quantity of steel? If the wages of steelworkers rise and simultaneously, the price of aluminum rises, quantity goes down. When rages arise, the supply curve shifts left increasing equilibrium price. The increase in the price of aluminum, a substitute or steal steal,
should lead to an increase in the demand for steel. The rightward shift in demand will push equilibrium price, price and quantity up. The price is indeterminant, depending on how much the demand and supply ships.
What happens to equilibrium price and quantity if wages fall?
A decrease in demand will cause the equilibrium price to fall; quantity supplied will decrease. An increase in supply, all other things unchanged, will cause the equilibrium price to fall; quantity demanded will increase. A decrease in supply will cause the equilibrium price to rise; quantity demanded will decrease.
What is the effect of an increase in the price of steel on the equilibrium price and quantity of automobiles?
Steel is an input for the production of cars, so a fall in the price of steel causes the supply curve for cars to shift right. As the demand curve remains the same, equilibrium price decreases and equilibrium quantity increases.
What happens to equilibrium price and quantity if income increases does demand or supply shift and in which direction?
An increase in demand and a decrease in supply will cause an increase in equilibrium price, but the effect on equilibrium quantity cannot be detennined. 1. For any quantity, consumers now place a higher value on the good,and producers must have a higher price in order to supply the good; therefore, price will increase.