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Question: your grandmother has just passed away and left you her...

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Your grandmother has just passed away and left you her favorite necklace. You always loved your grandmother and will miss her greatly. You want to keep the necklace as a way to remember​ her, and you would never sell the necklace for any amount of money. Use the Y​-axis on the graph to the right to demonstrate the​ following: 1.) Using the line drawing​ tool, draw the supply curve for your​ grandmother's necklace. 2.) Using the point drawing​ tool, determine the equilibrium price for the necklace. Label this point​ 'E'.

If you are not willing to sell the necklace for any amount of​ money, why is there an equilibrium price (particularly a price in thousands of​ dollars) for the​ necklace?

A.

The diagram is​ incorrect, because it does not adequately reveal your preferences.

B.

The​ necklace's price is determined by supply.​ Thus, it is a​ supply-determined item.

C.

The equilibrium price simply reflects​ that, for this​ demand-determined item, you are the highest bidder.

D.

The diagram reflects the fact that quantity demanded and quantity supplied are not equal.

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