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The following graph plots the market for electric guitars in Chicago, where there are always over 1,000 music stores. Suppose the Surgeon General issues a
The following graph plots the market for electric guitars in Chicago, where there are always over 1,000 music stores. Suppose the Surgeon General issues a public statement saying that consuming electric guitars is good for your health. Show the effect of this change on the market for electric guitars by shifting one or both of the curves on the following graph, holding all else constant. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Demand Supply PRICE (Dollars per guitar) QUANTITY (Guitars) Demand Supply Now suppose Congress passes a tax cut that increases the income of Chicago residents. If electric guitars are a normal good, this will cause the demand for electric guitars to
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