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Solved: In the following three situations, the market is initially in equilibrium. After
Chapter 0, Problem 1(choose chapter or problem)
In the following three situations, the market is initially in equilibrium. After each event described below, does a surplus or shortage exist at the original equilibrium price? What will happen to the equilibrium price as a result? a. In 2014 there was a bumper crop of wine grapes. b. After a hurricane, Florida hoteliers often find that many people cancel their upcoming vacations, leaving them with empty hotel rooms. c. After a heavy snowfall, many people want to buy second-hand snowblowers at the local tool shop.
Questions & Answers
QUESTION:
In the following three situations, the market is initially in equilibrium. After each event described below, does a surplus or shortage exist at the original equilibrium price? What will happen to the equilibrium price as a result? a. In 2014 there was a bumper crop of wine grapes. b. After a hurricane, Florida hoteliers often find that many people cancel their upcoming vacations, leaving them with empty hotel rooms. c. After a heavy snowfall, many people want to buy second-hand snowblowers at the local tool shop.
ANSWER:Step 1 of 4
Market equilibrium is the situation when the market forces balance each other. Supply and demand intersect to give the market equilibrium point. The amount of commodity and price at that point are called equilibrium quantity and price.