Desperate Homework help needed.please!?
Here is the situation and questions:
Consider the following event: Due to severe damage, a gas pipeline supplying gas to Arizona was shut down for a few weeks in the summer of 2003. Gas became scarce in Arizona, and prices rose, causing consumers to panic. *Predict how the following event affected the market equilibrium.
• Address the following questions in your analysis of this event’s affect on the market equilibrium:
1. Was there a shift in the supply curve, demand curve or both?
2. Did the shift happen to the left or to the right?
3. Describe the direction of the shift in the supply curve, demand curve, or both.
Answer:
Obviously, the first shift is the supply shifting to the left.
But then panic set in. What would people do if they suddenly thought gasoline was going to be unavailable? Everyone would run to the gas station and top off their tanks, and any portable gas containers too. What effect would this have on demand? There's your answer.
1. both shifted
2. supply left demand right
3. supply went left because it was low. demand went right because it was high.
those are vague and im not completely sure they are right either. they seem right to me though
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