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.

Answered by Patrick B. Economics tutor

1384 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

How much do I need to write for the long answer questions/essays at the end of the paper?


Brainstorm whether the NHS is an example of Government failure


Discuss how lower interest rates can affect an economy such as the UK.


How should I structure the long answers in the exam?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences