AP Microeconomics Mkt 3 B Explain Using Graphs As Appropriate Buyers Responses to Changes in Incentives and Constraints Questions

Practise identifying demand determinants, shifting the curve in the correct direction, tracing price and quantity effects, and inferring relationships between goods.

Exam points

shift demand for changes in income, tastes, expectations or the number of buyers
use substitute and complement prices to determine the direction of a related market's demand shift
distinguish a determinant-driven demand shift from an own-price movement along the curve
draw a demand shift and label the resulting changes in equilibrium price and quantity
infer a demand shift or relationship between goods from simultaneous price and quantity changes

[Maximum number: 1]

Soja Farm is a typical profit-maximizing firm that produces and sells soybeans in a constant-cost, perfectly competitive market that is in long-run equilibrium. The market equilibrium price of soybeans is $ 14 per bushel.

Soybeans are used as an input in the production of tofu. Tofu now becomes a more popular food option among consumers. On your graphs in part (a), show the short-run effect of the increased popularity of tofu on each of the following.

The new market equilibrium price and quantity of soybeans, labeled $\mathrm{P}_{2}$ and $\mathrm{Q}_{2}$ , respectively

(i) The market graph from part (a) must show a rightward shift of the market demand curve and the new equilibrium price labeled $\mathrm{P}_{2}$ and the new equilibrium quantity labeled $\mathrm{Q}_{2}$ .

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AP Microeconomics Mkt 3 B Explain Using Graphs As Appropriate Buyers Responses to Changes in Incentives and Constraints Questions question 1