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ePack: Principles of Microeconomics 6th Edition by Gregory Mankiw
Edition 6ISBN: 978-1133150558ePack: Principles of Microeconomics 6th Edition by Gregory Mankiw
Edition 6ISBN: 978-1133150558 Exercise 5
The equilibrium price of coffee mugs rose sharply last month, but the equilibrium quantity was the same as ever. Three people tried to explain the situation. Which explanations could be right? Explain your logic.
Billy : Demand increased, but supply was totally inelastic.
Marian : Supply increased, but so did demand.
Valerie : Supply decreased, but demand was totally inelastic.
Billy : Demand increased, but supply was totally inelastic.
Marian : Supply increased, but so did demand.
Valerie : Supply decreased, but demand was totally inelastic.
Explanation
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Condition: Equilibrium price rose sharpl...
ePack: Principles of Microeconomics 6th Edition by Gregory Mankiw
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