Question: Consider this system of demand and supply for apples. C is the changes in the cost of input for production. For the moment, assume I = 0 and C = 0.
Demand- Q = 6 - 2P + I
Supply- Q = 2P - C
Suppose I = 0 and now C = 1
A) Does the demand curve shift left as a result in the new value in C?
B) Does the supply curve shift as a result in the new value in C? Show the curve please.
C) Compute the value of the equilbirum quanity and price given the new value of C.