1.) The custom T-shirt printing business has many competitors, so that the perfect competition model may be considered a good approximation. Currently the market demand curve is given byQ= 120- 1.5p, whereas the market supply is given byQ=-20+ 2p.

Suppose there is a T-shirt craze that increases demand by 10% (that is, for each price, demand is now 10% greater than it was before the price increase). Determine the change in equilibrium quantity.

A.)increases 8.2%

B.)increases 10%

C.)increases 2.44%

D.)increases 5.48%

2.)The custom T-shirt printing business has many competitors, so

that the perfect competition model may be considered a good approximation. Currently the market demand curve is given byQ= 120- 1.5p, whereas the market supply is given byQ=-20+ 2p.

Assuming the original demand curve, now suppose there is an increase in the cost of blank T-shirts, an essential input into the business of selling custom T-shirts. Specically, for each unit by each supplier, the production cost goes up by 10%. Determine the new supply curve.

A.)Q=-22+2p

B.)Q=-20+1.82p

C.)Q=-18+2.2p

D.)Q =-22+2.2p

The custom T-shirt printing business has many competitors, so

that the perfect competition model may be considered a good approximation. Currently the market demand curve is given byQ= 120- 1.5p, whereas the market supply is given byQ=-20+ 2p.

Assuming the original demand curve, now suppose there is an increase in the cost of blank T-shirts, an essential input into the business of selling custom T-shirts. Specically, for each unit by each supplier, the production cost goes up by 10%. Determine the change in equilibrium price.

A.) increases by 5.42%

B.) increases by 10%

C.) increases by 8.22%

D.)increases by 4.8%