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Chapter 4: Q. 4.4 (page 93)

There are simultaneous changes in the demand for and supply of tablet devices, with the consequences being an unambiguous decrease in the equilibrium quantity of these devices but no change in the market clearing price. What changes in the demand for and supply of tablet devices could have generated these outcomes? Explain.

Short Answer

Expert verified

Supply and demand falls in the same proportion.

Step by step solution

01

Given information

Reduced equilibrium quantity and no change in market clearing price.

Demand is the amount of goods required or asked by the people in that economy.

Supply is the amount of goods given or available in an economy.

02

Step2. Explanation

Since, the market price is constant, and there is a fall in quantity, this is a result of decreased demand and supply, both in the same proportion so that the equilibrium price remains constant and the quantity falls.

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