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  3. consider the market for pens suppose that the number of...

Question: consider the market for pens suppose that the number of...

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Consider the market for pens. Suppose that the number of students with an allergy to pencil erasers increases, causing more students to switch fronm pencils to pens in school. Moreover, the price of ink, an important input in pen production, has dropped considerably On the following grapn, labeled Scenario I, indicate the effect these two events have on the demand for and supply of pens. Scenario 1 10 Demand Supply 5 0 2 35 6789 10 QUANTITY (Millions of pens) Next, complete the following graph, labeled Scenario 2, by shifting the supply and demand curves in the same way that you did on the Scenario 1 graph.Next, complete the fallowing graph, labeled Scenario 2, by shiting the supply and demand curves in the same way that you did on the Scenario i graph Scenario 2 10 Demand Supply 0 123 45 78 10 QUANTITY (Millions of pens) Compare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them that wasnt apparent before the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens use the results of your answers on botn the Scenario I and scenario 2 graphs to complete the sollowing rable. Begin by indicating the overali change0 2 35 6789 10 QUANTITY (Millions of pens) Compare both the Scenario 1 and Scenario 2 graphs. Notice that after completing both graphs, you can now see a difference between them that wasnt apparent berore the shifts because each graph indicates different magnitudes for the supply and demand shifts in the market for pens. Use the results of your answers on both the Scenario 1 and Scenario 2 graphs to complete the following table. Begin by indicating the overall change in the equilbrium price and quantity after the shift in demand or supply for each shift-magnitude cenario. Then, in the final column, indicate the resuiting change in the equilibrium price and quantity when supply and demand shift in the direction you previously indicated on both graphs. If you cannot determine the answer wthout knowing the magnitude o the shirts, choose Cannot determine Change in Equilibrium Objects Equilibrium Object Price Quantity Scenario 1 Scenario 2 When Shift Magnitudes Are Unknown True or False: When both the demand and supply curves shift, the curve that shifts by the smaller magnitude determines the effect on the undetermined equilibrium object. True False Grade It Now Save & Continue Continue without saving

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