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Question: the following diagram represents the market for butter for each of...

Question details

The following diagram represents the market for butter.

Assessed2Picture1.png

For each of the following scenarios, determine the effect on the equilibrium price and the equilibrium quantity in the market for butter.

 The price of margarine (a substitute for butter) increases. The equilibrium price

a) increases

b) decreases

and the equilibrium quantity

a) increases

b) decreases

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