Let's say that companies that produce and sell silk shirts hire analysts to analyze the economy and make guesses about the future, and that those analysts predict that the economy will worsen and fewer people will want to buy silk shirts next month.
To make this extra clear, let's say that the analysis is done in Month One, and the change in how many people will want to buy silk shirts is expected to occur in Month Two. In Month One, the likely effect on the market for silk shirts will be:
A. P* up, Q* down
B. P* up, Q* up
C. P* down, Q* down
D. P* down, Q* up
E. A movement to the right along the supply curve.
A. P* up, Q* down According to the expectation the supply curve will shift leftward to fit the future change. So the price will rise and the quantity will fall.
Numbers and figures are an essential part of our world, necessary for almost everything we do every day. As important…
APPROVED BY CLIENTS
I REALLY appreciate the details being provided as requested. Both times the assignments have come back earlier than I requested. Having details and not just answers has super helped me understand how to replicate the solution process on other similar problems. GREAT SERVICE!!!