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.