Answer to Question #268978 in Economics of Enterprise for Brai mnyabe

Question

Draw new supply curve assuming that quantity supplied at given period

(I)increased by 10 unit

(ii)increased by 50 unit

(iii)decreased by 5 unit

(iv)halved

Answer 1

We take a normal inelastic supply curve with total supply at 50.

i) When we increase the supply by 10 units, the supply curve shifts right(Blue line)

ii) when we increase the supply by 50 units then the supply curve shifts right (Green line) 

iii) The supply curve is shown by the yellow line when decreased by 5 units

 

iv) When we halve the supply curve, the new supply curve was shown by brown line. With the total supply at 25.

 

Here we have taken a demand curve D . 

There are various equilibrium prices as the supply curve shifts and meets the demand curve at different points.