The equilibrium quantity of beef meatball drops

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We observe that the equilibrium price of turkey meatball rises but the equilibrium quantity of beef meatball drops. Assume that turkey meatball and beef meatball are substitutes. Also note that turkey and turkey meatball are two different objects. The same caution applies to beef and beef meatball. In light of this observation, explain whether or not each of the following statement is true, using for each statement the graph of demand and supply curve for the market of turkey meatball and the market of beef meatball.

(1) A rise in the price of turkey is responsible for these observations.

(2) A fall in the price of beef is responsible for these observations.

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5 questions of economics are answered. One of them deals with shiftsin demand and supply curves in markets for substitutes due to changesin price in one market. The other one deals with consumer surplus andproducer surplus. One problem deals with inverse demand and inversesupply function. Reverse Causality is addressed in one of theproblems. The last problem deals with production possibility frontier.

Reference no: EM131107551

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