Asked by Kolby Finnie on May 27, 2024
Verified
Suppose that the garden gnome industry was in long-run equilibrium given the circumstances described Suppose, that it was discovered to everyone's surprise on January 1, 1993, after it was too late to change orders for gnome molds, that the cost of the plaster and labor needed to make a gnome had changed to $6.If the demand curve does not change, what will happen to the equilibrium price of gnomes?
A) Rises by $6.
B) Rises by $1.
C) Stays constant.
D) Falls by $1.
E) Falls by $3.
Demand Curve
A graph showing the relationship between the price of a good and the quantity demanded, typically downward sloping, indicating that demand decreases as price increases.
Plaster
A building material made of lime or gypsum, water, and sand, used for coating walls and ceilings.
Labor
The deployment of human manpower, both in physical form and intellectual capacity, for generating goods and services.
- Assessing the alterations in production charges and their effects on the equilibrium of supply and demand.
- Investigating the impact of supply and demand dynamics on the equilibrium of industries.
Verified Answer
Learning Objectives
- Assessing the alterations in production charges and their effects on the equilibrium of supply and demand.
- Investigating the impact of supply and demand dynamics on the equilibrium of industries.
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