Price and quantity demanded are inversely

Running head: MICROECONOMICS
Microeconomics
Name of Student:
Name of University:
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Author Note:

MICROECONOMICS1
Table of Contents
Answer to Question: 1.....................................................................................................................2
Answer to Question: 2.....................................................................................................................3
Answer to Question: 3.....................................................................................................................4
Answer to Question: 4.....................................................................................................................6
Reference List..................................................................................................................................8

Quantity
Pric
e
DB
DA
QA
A
QB
PA
PB
SA
MICROECONOMICS2
Answer to Question: 1
Answer: a
Normal goods are those where a rise in income of the consumer leads to arise in demand
for the good. Considering that tickets of CFL game are normal goods, a rise in income of CFL
fans, would lead to a growing demand for CFL tickets such that it would shift the demand curve
towards right, from position DA to DB. Supply of the tickets is relatively inelastic because
quantity of the seats cannot be changed, although quantity of tickets sold could be changed for a
bit (Geroski, & Jacquemin, 2013).
Figure 1: Effect of change in demand
Source: (As created by the author)
The result is a rise in equilibrium price and quantity from level PA and QA to PB and QB
respectively, because of rising demand, as shown in Figure 1.