Suppose You Wish to Analyze the Change in the Equilibrium

Multiple Choice

Suppose you wish to analyze the change in the equilibrium price of lumber as a result of pine beetle infestations that are destroying trees in the West. What would your first step be?

A) to identify the new equilibrium point
B) to decide whether the fires affect the quantity demanded
C) to decide whether the fires affect the price
D) to decide whether the fires shift demand or supply