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Chapter 3: Q. d - For Critical Thinking (page 57)

How could laws that ban tips causeareduction in the quality of the delivery

of services?

Short Answer

Expert verified

Fall in demand.

Step by step solution

01

Step1. Given information

Natural gas price has declined significantly.

02

Step2. Explanation

Since natural gas is a substitute for other sources of energy like coal and nuclear power, a fall in price of natural gas will hamper the demand for other sources. Therefore, like coal, demand for nuclear power will fall in US, Russia and China.

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Most popular questions from this chapter

Suppose that inalater market period,the quantities

supplied in the table in Problem 3-1 are unchanged.

The amount demanded,however,has increased by 30

million at each price.Construct the resulting demand

curve in the illustration you made for Problem 3-1.Is

this an increase or a decrease in demand? What are

the new equilibrium quantity and the new market

price?Give two examples of changes in ceteris paribus

conditions that might cause suchachange.

What happens to ticket scalpers who are still holding tickets after an

event has started?

For each of the following shifts in the demand curve and associated price change of complement or substitute item, explain whether the price of the complement or substitute must have increased or decreased.

a.Arise in the demand for a dashboard global positioning-system device follows a change in the price of automobiles, which are complements.

b.A fall in the demand fore-book readers follows a change in the price of e-books, which are complements.

c.Arise in the demand for tablet devices follows a change in the price of ultrathin laptop computers, which are substitutes.

d.A fall in the demand for physical books follows a change in the price of e-books, which are substitutes.

Consider the market for smartphones. Explain whether the following events would cause an increase or a decrease in supply or an increase or a decrease in the quantity supplied. Illustrate each, and show what would happen to the equilibrium quantity and the market price.

a. The price of touch screens used in smartphones declines.

b. The price of machinery used to produce smartphones increases.

c. The number of manufacturers of smartphones increases.

d. There is a decrease in the market demand for smartphones.

Understand how the interaction of demand

and supply determines the equilibrium

price and quantity
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