Posted by tofu on .
ok this is the scenario
12. Industry: cell phones
Event: 1.) cell phones are reported to cause brain tumors
2.) the cost of cell phone electronic chips are cheaper
so in this scenario, demand decreases and the supply increases....thus demand shifts to the left and supply shifts to the right
but what is the effect on P and Q ( price and quantity)
I know price decreases for sure....but is Q ambigious? cuz when i drew my graph, i can make it seem like Q increase or decrease
You are correct; effect on Q is ambigious or uncertain. Go with that answer.