Depict what happens in the market for rubber
Problem
Consider the market for rubber. Let's suppose a massive forest fire causes 50% of the world's supply of rubber to be destroyed. First, depict what happens in the market for rubber. Then, depict what happens in the market for tires.
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How do we show equilibrium graphically? Share an example from your own experience when the market was not in equilibrium for a product or service.
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First, depict what happens in the market for rubber. Then, depict what happens in the market for tires.
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Make an example that demonstrates the Law of Diminishing Returns. Why, in this example, do you experience diminishing returns?
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