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Temp Homework LACAS-JT
Temp Homework LACAS-JT
Temp Homework LACAS-JT
3 for analysis/app
Drawing the graph required
As seen in the figure, initial equilibrium was at point E
and market price was P and quantity traded was Q. As
successful advertisement shifts demand curve to the
right due to more awareness and wants created. At price
P from area E to a, there is a shortage as demand is more
than supply.
Evaluation 2
This shortage will put pressure on price to rise and as a
result, QD contracts and QS extends till we reach the new
equilibrium E1, with a higher price and quantity trade i.e.
P1 and Q1.