Question

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, use a diagram to illustrate how each event affects the equilibrium price and quantity in the market for Shakespeare's plays.
A) The playwright Christopher Marlowe, Shakespeare's chief rival, is killed in a bar brawl.
B) The bubonic plague, a deadly infectious disease, breaks out in London.
C) To celebrate the defeat of the Spanish Armada, Queen Elizabeth declares several weeks of festivities, which involve commissioning new plays.

Answer 1

Answer:

A - increased equilibrium price and quantity.

B - decrease in equilibrium price and quantity.

C - increase in equilibrium price and quantity

Explanation:

A the demand for Shakespeare play will increase because of death of Marlowe which means price of Marlowe plays would increase because of short supply and this would cause an indirect increase in price of Shakespeare plays which results in rightward shift of demand curve for Shakespeare play thereby increasing equilibrium price and quantity.

B a lot of population would deter from seeing Shakespeare plays to avoid contracting diseases which cause drop in demand and demand curve would shift to the left thereby causing equilibrium price to decrease.

C the queens commissioning of new plays for the festival weeks would increase demand for Shakespeare plays at any given price which would cause rightward shift of demand curve resulting in increased equilibrium price.