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Use the Supply and Demand Model to Explain What Happens

Question 162

Essay

Use the supply and demand model to explain what happens to the equilibrium price and the equilibrium quantity for pasta in the following cases:
(A)There is a large expansion in the number of firms producing pasta.
(B)It is widely publicized in the press that pasta isn't as healthful as previously thought.
(C)There is a sudden increase in the price of pasta flour,which is used to produce pasta.
(D)Pasta suddenly becomes popular because a movie idol promotes it in television commercials.

Correct Answer:

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(A) Supply shifts right,increasing the e...

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