Asked by
Phillip Avalos
on Dec 01, 2024
Verified
Suppose that the garden gnome industry was in long-run equilibrium given the circumstances described .Suppose, that it was discovered to everyone's surprise on January 1, 1993, after it was too late to change orders for gnome molds, that the cost of the plaster and labor needed to make a gnome had changed to $8.If the demand curve does not change, what will happen to the equilibrium price of gnomes?
A) Rises by $1.
B) Falls by $1.
C) Stays constant.
D) Rises by $8.
E) Falls by $4.
Demand Curve
A graphical representation showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.
Plaster
A building and sculpting material made from a mixture of water, gypsum, and sometimes fibers, used for coating walls and ceilings.
Labor
The physical and mental effort expended by individuals in the production of goods and services as part of an economy.
- Analyzing the transformations in the costs of production and how they affect the balance between supply and demand.
- Scrutinizing how variations in supply and demand affect industry equilibrium.
Verified Answer
JL
Learning Objectives
- Analyzing the transformations in the costs of production and how they affect the balance between supply and demand.
- Scrutinizing how variations in supply and demand affect industry equilibrium.