00:01
In the market for hamburgers, we've got five scenarios.
00:03
We want to know what's going to happen to our demand curve as well as then what's going to change with our equilibrium.
00:08
So if we're looking at an increase in the price of tacos, and if we assume that hamburgers and tacos are substitute goods of one another, the increase in the price of tacos means people are going to purchase fewer tacos and more hamburgers.
00:19
So the demand curve for hamburgers is going to shift to the right from d note to d1.
00:25
Our new equilibrium point here gives us a higher price for hamburgers at p1.
00:31
And a higher quantity for hamburgers at q1.
00:36
Now if we're looking at an increase in the price of fries, assuming that fries and hamburgers are complementary goods, meaning that we typically consume these together.
00:46
If the price of fries increases, people are going to purchase fewer hamburgers because they want fries with their hamburgers.
00:51
So that increase in the price of fries is going to reduce demand for hamburgers, shifting it to the left from d note to d1.
00:58
The leftward shift of the demand curve gives us a new equilibrium with a lower quantity at q1 and a lower price at p1.
01:10
Part c, if income falls and we're assuming hamburgers are a normal good, so meaning that with a fallen income, people are going to be consuming less of this good.
01:19
Income falls, and we see that the demand for hamburgers is going to decrease.
01:23
So we're shifting to the left again from d note to d1...