Answer to Question #241396 in Macroeconomics for 123

Question

What will happen to your analysis supposing the college increases the number of enrollment

Answer 1

Supposing the college increases the number of enrollment, the equilibrium quantity and price will increase because their share in the economy will rise. There will be more people who want to use stationery, causing the demand to rise. At the original price, there will be a shortage of stationery, signalling sellers to raise prices until the quantity supplied and the quantity demanded balance.