Asked by
Kendall Smith
on Oct 14, 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) Falls by $1.
B) Rises by $6.
C) Stays constant.
D) Rises by $1.
E) Falls by $3.
Demand Curve
A visual depiction showing how the quantity demanded of a good correlates with its price, usually showing a decline in demand as prices increase.
Plaster
A building material used for coating, protecting, and decorating interior and exterior walls and ceilings, made from lime, sand, and water.
Labor
The effort, both physical and mental, that people contribute to the production of goods and services in an economy.
- Analyzing changes in production costs and their effects on supply and demand.
- Assessing the implications of supply and demand shifts on industry equilibrium.
Verified Answer
EE
Learning Objectives
- Analyzing changes in production costs and their effects on supply and demand.
- Assessing the implications of supply and demand shifts on industry equilibrium.