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Answer in Microeconomics for Erica #160341

Author:
March 27th, 2023

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X;(2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. removing the subsidy placed on product X years ago will?

removing the subsidy placed on product X years ago will decrease the supply (S), as a result the equilibrium price (P) of X will increase, and the equilibrium quantity (Q) of X will decrease.

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