Question
DB2: Supply & Demand Consider the following 2 hypothetical situations. 1. It's a very hot, sunny day and Peter is outside and feels very thirsty.
DB2: Supply & Demand
Consider the following 2 hypothetical situations.
1. It's a very hot, sunny day and Peter is outside and feels very thirsty. He sees a lemonade stand where a glass of lemonade is selling for $0.50. He buys one glass and drinks it. The next day, Peter is outside and the temperature is much higher than the first day. Peter is even more thirsty, and buys 2 glasses of lemonade. He pays a total of $1.00
2. It's a very hot, sunny day and Peter is outside and feels very thirsty. He sees a lemonade stand where a glass of lemonade is selling for $0.50. He buys one glass and drinks it. The next day is same as before, however, a glass of lemonade is selling for $0.30 a glass. Peter buys 2 glasses of lemonade and pays a total of $0.60.
In both of the situations we notice that Peter buys 1 glass on the first day and 2 glasses on the 2nd day. How are the 2 situations different? Where do you find a change in quantity demanded and where do you find a change in demand for Peter? Please explain as clearly as possible
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