Question

hort queationa: Points: 4×1.25=5 (Explun pour aniwen) 1. What are the effects on the equilibium price and quantity of ateet it the mass of st eelworkers falt and, simultaneovily, the price of aluminum falls? 2. True/False (Explain): If both demand and supply decrease at the same time, equilibe price and quantity will increase.

Answer 1

The effects on the equilibrium price and quantity depend on the changes in the mass of steelworkers and the price of aluminum. If both demand and supply decrease, the equilibrium price and quantity will decrease.

Step-by-step explanation:

In the given scenario, the following effects will occur on the equilibrium price and quantity:

1. The decrease in the mass of steelworkers will lead to a decrease in the supply of steel. This will cause the equilibrium price to increase and the equilibrium quantity to decrease.
2. If the price of aluminum falls, the supply of aluminum will increase. This will cause the equilibrium price to decrease and the equilibrium quantity to increase.

Therefore, the effects on the equilibrium price and quantity will depend on the magnitude of the change in the mass of steelworkers and the price of aluminum.

If both demand and supply decrease at the same time, the equilibrium price and quantity will decrease, not increase. This is because a decrease in both demand and supply will lead to a decrease in the equilibrium quantity demanded, resulting in a lower equilibrium price and quantity.