Answer
A) The supply curve changes to the left because of the cold weather causing damage to the orange crop.
B) The demand curve shifts to the left and the equilibrium price of the hotel rooms are lower in the summer than in the winter.
C) The equilibrium price of gasoline rises and the demand for Cadillac will decrease. Furthermore, the demand curve for used Cadillacs will shift to the left while the supply curve shifts to the right causing a decline in the equilibrium price for used Cadillacs.
Work Step by Step
A) Therefore, the new equilibrium price is higher than the older equilibrium price.
B) People from New England travel during the winter break in order to escape from the cold weather so the demand for rooms is higher than in the summer where the weather is warmer.
C) The war in the Middle East would eventually affect many markets because of the oil production is located here. Therefore, all the vehicles that use oil and gasoline as a fuel would be affected and these would decrease the desire for people to acquire an expensive car such as a Cadillac.
