In the summer of 2006, the National Post predicted major changes in the world price of steel. The...

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In the summer of 2006, the National Post predicted major changes in the world price of steel. The table below cites a series of events described in the National Post article. ( Greenwood, John, “Bust could be worst since end of Second World War.” National Post ( Ontario) 7 Jul 2006: pg. FP.1.Fr)

For each event, illustrate the impact on the relevant market and determine what will happen to the equilibrium price and quantity in that market.

David · Accepted Answer

Event Market Show which curve shifts  Equilibriu
m Price 
rise or fall 
Equilibriu
m quantity 
rise or fall 
China’s steel 
production 
capacity has 
expanded 
Steel Supply will increase.

In the summer of 2006, the National Post predicted major changes in the world price of steel. The table below cites a series of events described in the National Post article. ( Greenwood, John, “Bust...

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