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You read a news article describing an increase in the number of rescue puppies in the city. More rescue puppies imply an increase in the supply of puppies for adoption (outside the pet market

  1. You read a news article describing an increase in the number of rescue puppies in the city. More rescue puppies imply an increase in the supply of puppies for adoption (outside the pet market). Using a supply-and-demand framework show the following:

 

  1. 1 Show the effect of the increase in the number of rescue puppies on the equilibrium price and quantity in the pet market for puppies.

 

  1. 1.2 Show the intercepts of the demand and supply curves on your diagram and explain what these two points represent.

 

  1. 1.3 The government is concerned about the wellbeing of puppies and decides to implement a price floor for puppies in the pet market. What is the effect of this policy on price and quantity in the market for puppies and the ‘market’ for puppy adoption? Show it graphically.

 

  1. 1.4 Who wins and who loses with this policy?

Apr 12 2021 View more View Less

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