Micro Economics Assignment 2 With the aid of supply and demand diagrams, carefully explain: a.Why the price of tomatoes fluctuates more than the price of tinned soup b.how a substantial increase in labour productivity in the computer production industry might affect: 1-the price and output of computers 2- the price and output of scanners c.The possible effects of price and output of coal when demand and supply decrease (i.e shift) over the …showed first 75 words of 549 total…

…showed last 75 words of 549 total…often happen in the market for capital. Demand substantial shifts to the right, whereas supply only shifts a small way causing the price to rise from P1 to P2. e. Rail and Coaches are substitute goods. Therefore if the price of rail travel is too rise then the demand would contract, people would then swap to coach travel. This exchange would cause a shift in coach fares demand allowing them to safely raise their prices.