QuestionAugust 3, 2025

Use the three-step demand -supply analysis described below to analyze changes to the equilibrium price, and quantity in the California electricity market when a hotter than normal summer increases the use of electricity. Step 1: Decide if hot weather shifts the electricity demand or the supply curve or both: hot weather increases the use of air conditioners therefore it affects the supply curve. hot weather increases the use of air conditioners therefore it affects the demand curve. hot weather increases the use of air conditioners therefore it affects both the demand and supply curves. hot weather does not affect electricity demand or supply.

Use the three-step demand -supply analysis described below to analyze changes to the equilibrium price, and quantity in the California electricity market when a hotter than normal summer increases the use of electricity. Step 1: Decide if hot weather shifts the electricity demand or the supply curve or both: hot weather increases the use of air conditioners therefore it affects the supply curve. hot weather increases the use of air conditioners therefore it affects the demand curve. hot weather increases the use of air conditioners therefore it affects both the demand and supply curves. hot weather does not affect electricity demand or supply.
Use the three-step demand -supply analysis described below to analyze changes to the equilibrium price, and quantity in the California electricity market when a hotter than normal summer increases the use of electricity. Step 1: Decide if hot weather shifts the electricity demand or the supply curve or both: hot weather increases the use of air conditioners therefore it affects the supply curve. hot weather increases the use of air conditioners therefore it affects the demand curve. hot weather increases the use of air conditioners therefore it affects both the demand and supply curves. hot weather does not affect electricity demand or supply.

Solution
3.2(154 votes)

Answer

The hot weather increases the demand curve, leading to a higher equilibrium price and quantity in the California electricity market. Explanation 1. Identify the Curve Affected Hot weather increases the use of air conditioners, which directly affects the demand for electricity. Therefore, it shifts the **demand curve** to the right. 2. Analyze Demand Shift An increase in demand with a rightward shift of the demand curve leads to a higher equilibrium price and quantity, assuming supply remains constant. 3. Consider Supply Impact Hot weather does not inherently affect the supply curve of electricity unless specified by other factors like production constraints or resource availability.

Explanation

1. Identify the Curve Affected<br /> Hot weather increases the use of air conditioners, which directly affects the demand for electricity. Therefore, it shifts the **demand curve** to the right.<br /><br />2. Analyze Demand Shift<br /> An increase in demand with a rightward shift of the demand curve leads to a higher equilibrium price and quantity, assuming supply remains constant.<br /><br />3. Consider Supply Impact<br /> Hot weather does not inherently affect the supply curve of electricity unless specified by other factors like production constraints or resource availability.
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