The two accompanying diagrams show supply and demand curves for two substitute commodities: regular cell phones and smartphones. 11eb75b8_ee64_ae72_adfc_ad02993093c2_SM2334_00 a. On the right-hand diagram, show what happens when rising raw material prices make it costlier to produce regular cell phones. b. On the left-hand diagram, show what happens to the market for smartphones.

Economics 12th Edition by William Baumol, Alan S Blinder

Edition 12ISBN: 978-0538453691

Economics 12th Edition by William Baumol, Alan S Blinder

Edition 12ISBN: 978-0538453691

Exercise 5

The two accompanying diagrams show supply and demand curves for two substitute commodities: regular cell phones and smartphones.

a. On the right-hand diagram, show what happens when rising raw material prices make it costlier to produce regular cell phones.
b. On the left-hand diagram, show what happens to the market for smartphones.

Explanation

Verified

(a) Raw material is considered as one of...