Answer to Question #129734 in Microeconomics for Sindiswa

Question

Describe a scenario (real-life or fictitious) that reflects each of the following cases (Q.5.1-Q.5.3).

Thereafter, graphically illustrate and explain each scenario in each case clearly showing the impact

of the change on the equilibrium price and the equilibrium quantity of your chosen good.

(In cases where you simultaneously change demand and supply, assume that they change by the

same magnitude).

Q.5.1 An increase in demand (while supply remains constant).

(Two marks will be awarded for your scenario, four marks for your graph and

four marks for your explanation).

(10)

Q.5.2 An increase in demand and a simultaneous decrease in supply.

(Two marks will be awarded for your scenario, five marks for your graph and

three marks for your explanation).

(10)

Q.5.3 A decrease in demand and a simultaneous increase in supply.

(Two marks will be awarded for your scenario, five marks for your graph and

three marks for your expla nation).

(10)

Answer 1

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