Suppose that Verizon runs an advertising campaign that is successful. What happens to the equilibrium quantity demanded and equilibrium price for AT&T’s products and services?


a)The equilibrium quantity and price for AT and T will fall


b)The equilbrium quantity and price for AT and T will rise


c)The equilibrium quantity for AT and T will rise, but the equilibrium price will fall


d)The equilibrium quantity for AT and T will fall, but the equilibrium price will rise

I was thinking A but im stuck between a and d? need some help!!

Their opposition runs a successful campaign. This means that demand decreases.

For supply and demand, the demand curve will shift downward (less demand at each price point), thus leading to an decrease in both equilibrium quantity and price.

The answer will be A.



This post was edited by Dontrunaway on Nov 23 2014 09:09pm

thx!!!

This post was edited by Oblock on Nov 23 2014 09:14pm

Derp. My bad. Will correct previous response. >.>

e/ It should be right now.

This post was edited by Dontrunaway on Nov 23 2014 09:10pm

In the grape industry, Because of advances in gene splicing technology, more grapes are able to be borne on a stalk . So:


A)The supply curve will shift to the right and equilibrium price will fall, while equilibrium quantity will rise

B)The supply curve will shift to the right and equillibrum price will rise, while equilibrium quantity rises too

C)The demand curve will shift to the right, increasing equilibrium quantity and price

D)Nothing will change

Im assuming C because they should be more of a demand for grapes? Or is it because its a technology change, will it change supply curve?



Imagine that we are talking about a product for which there is a fixed amount of supply- such as the number of cabin places on a luxury liner. As as result of an advertising campaign for the luxury liner, demand increases. This will result in:


1)A decrease in equilibrium prices, no change in equilibrium quantity

2)An increase in equilibrium prices, no change in equilibrium quantity

3)An increase in equilibrium prices and an increase in equilibrium quantity

4)A decrease in equilibrium prices and a decrease in equilibrium quantity

Im stuck between 1 and 4, Assuming that if demand increases it must be that the prices drop so that more demand will equate to profits lost?

THANKS!!

Same picture.

For grapes: more grapes per vine = more supply, supply increases (shifting right), thus driving quantity up and price down. Answer is A

Imagine a different picture where the supply curve is a vertical line for the next problem. The problem statement states supply quantity is constant.

For luxury liner, problem states a demand increase (shift to the right), increasing the price.

The answer should be B (or 2).

Wouldn't the liner problem be c since it increases demanded(also quantity)? or

The supply quantity is constant, as stated in the problem. Therefore, only price can change.

Thxs!