Exhibit 4-8

-Refer to the exhibit.Suppose the market demand curve is given by D₁ and the supply by S₁, and suppose equilibrium price is P2 and equilibrium quantity is Q₁.If there is an increase in the birth rate, what will the new equilibrium price and equilibrium quantity be?

Question

Exhibit 4-8
 
-Refer to the exhibit.Suppose the market demand curve is given by D₁ and the supply by S₁, and suppose equilibrium price is P2 and equilibrium quantity is Q₁.If there is an increase in the birth rate, what will the new equilibrium price and equilibrium quantity be?

Quizplus · Accepted Answer

An increase in the birth rate would likely increase the demand for goods and services as the population grows. This would shift the demand curve to the right, from D₁ to D₂, leading to a new equilibrium at a higher price (P₄) and a higher quantity (Q₃).

Exhibit 4-8 -Refer to the Exhibit.Suppose the Market Demand Curve Is Given