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Assume the demand for lumber suddenly rises because of a rapid growth of demand for new ho

Assume the demand for lumber suddenly rises because of a rapid growth of demand for new housing. Assume no change in supply. Why does the equilibrium price of lumber rise? What would happen if the price did not rise under the demand and supply circumstances described?

6. Assume that both the supply of bottled water and the demand for bottled water rise during the summer but that supply increases more rapidly than demand. What can you conclude about the directions of the impacts on equilibrium price and equilibrium quantity?

7. When asked for investment advice, humorist Will Rogers joked that people should "[b]uy land. They ain't making any more of the stuff."  Explain his advice in terms of the supply and demand model.

 

Dec 05 2019 View more View Less

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