Econ1012 Principles Of Economics | Assessment Answers
Questions:
Using demand and supply graphs illustrate and explain the effect of the following events on the market for solar panels (assume ceteris paribus). In your answer, include an explanation of the market adjustment process.
(b) The price of electricity for an average household has decreased by 50 percent.
(c) The number of solar panel producers have increased by 50 percent.
Answers:
Figure: effect of price of solar panel being more than equilibrium price
Source: author creation
From the above diagram it can be seen that as the price of solar panel increases above the equilibrium price (ceteris Paribus) that is if it increases from “p” to “p1” then there is excess supply in the market which can be seen from the difference between “a” and “b”. this is because at that price supplier will supply more and buyers will demand less. Due to excess supply the price will slowly start to fall back again to the equilibrium price “p” that is denoted by the movement of the arrow back to the equilibrium point “e” .
Figure: effect of decrease in price of electricity
Source: author creation
From the above diagram, it can be seen that as the price of electricity decreases the demand for electricity will increase. On the other hand, electricity being a substitute good for solar panel, thus the demand for solar panel will decrease, as people will start consuming more electricity compared to solar panel. Price of solar panel becomes more compared to electricity.
Figure: effect of increase in the number of solar panel
Source: author creation
From the above diagram, it can be seen that as the number of solar panel will increase in the market the supply of solar panel will increase. This in turn will increase the price and decrease the demand for solar panel from Q to Q1. Thus, an increase in supply of solar panel causes a inverse effect on the demand for solar panel .
References
Mankiw N. G. Essentials Of Economics. Cengage Learning, (Cengage learning, 7th ed, 2014)
Baumol W. J. Microeconomics: Principles And Policy. (Cengage Learning, 13th ed, 2015)
Buy Econ1012 Principles Of Economics | Assessment Answers Online
Talk to our expert to get the help with Econ1012 Principles Of Economics | Assessment Answers to complete your assessment on time and boost your grades now
The main aim/motive of the management assignment help services is to get connect with a greater number of students, and effectively help, and support them in getting completing their assignments the students also get find this a wonderful opportunity where they could effectively learn more about their topics, as the experts also have the best team members with them in which all the members effectively support each other to get complete their diploma assignments. They complete the assessments of the students in an appropriate manner and deliver them back to the students before the due date of the assignment so that the students could timely submit this, and can score higher marks. The experts of the assignment help services at urgenthomework.com are so much skilled, capable, talented, and experienced in their field of programming homework help writing assignments, so, for this, they can effectively write the best economics assignment help services.
