You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Question

Quizplus · Accepted Answer

Before graphing the market for lumber, it is necessary to determine whether the recent forest fires in the West affected the demand or supply side of the market. Depending on the answer to this question, either the demand or supply curve will shift, causing a change in the equilibrium price. Once the affected curve is identified, the appropriate shift can be graphed, and the resulting effect can be analyzed. Therefore, the correct first step is to decide whether the fires affected demand or supply.

You Have Been Asked by Your Economics Professor to Graph