Assume the market for Easter rabbits is currently at long term equilibrium. Assume Australia is the largest supplier of easter rabbits. A sudden explosion in the rabbit population of Australia leading up to Easter. How will the market react?

The positive supply shock for Easter rabbits will shift the supply curve outwards, while demand remains unchanged. In the short term the quantity of Easter rabbits bought will increase while the price for these rabbits will decrease. In the medium term the price and quantity will begin returning to long term equilibrium as the shock effect dampens. Finally, in the long term the Easter rabbit market returns to long run equilibrium.

PB
Answered by Patrick B. Economics tutor

1527 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What is the difference between deflation and falling inflation?


To what extent can government policies be used to increase economic growth without increasing the rate of inflation


Why is profit maximising at MC=MR?


Evaluate the case for the introduction of subsidies for agricultural produce. (15 marks)


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2025 by IXL Learning