Question

(Problem 14a.) Will Shakespeare is a struggling playwright in sixteenth-century London. As the price he receives for writing a play increases, he is willing to write more plays. For the following situations, choose the statement which best explains how the event affects the equilibrium price and quantity in the market for Shakespeare's plays. The playwright Christopher Marlowe, Shakespeare's chief rival, is killed in a bar brawl. The demand for Shakespeare's plays will increase, and as a result, equilibrium price will fall and equilibrium quantity will rise. The demand for Shakespeare's plays will increase, and as a result,

Answer 1

Answer:

-The equilibrium price would increase.

- quantity in the market for Shakespeare play would increase

Explanation:

The death of Marlow that supplies a substitute good would cause decrease in supply which can't match the demand, thereby causing the price of product to increase and this would indirectly give Shakespeare an opportunity to increase its price and supply to meet the lack in demand thus resulting in creation of new price equilibrium.