Questions: Figure 3-3 Refer to Figure 3-3. The figure above shows the supply and demand curves for two markets: the market for original Michelangelo sculptures and the market for Ray Ban sunglasses. Which graph most likely represents which market? Graph B represents the market for original Michelangelo sculptures and Graph A represents the market for Ray Ban sunglasses. Graph A represents both the market for original Michelangelo sculptures and Ray Ban sunglasses. Graph B represents both the market for original Michelangelo sculptures and Ray Ban sunglasses. Graph A represents the market for original Michelangelo sculptures and Graph B represents the market for Ray Ban sunglasses.

Solution Steps

Graph A shows a typical supply and demand curve where both supply and demand are relatively elastic. This is characteristic of a market with many substitutes and a competitive environment.

Graph B shows a supply curve that is almost vertical, indicating that the supply is inelastic. This is characteristic of a market with a fixed supply, such as original Michelangelo sculptures, where the quantity cannot be increased regardless of the price.

Given the characteristics of the graphs:

• Graph A, with elastic supply and demand, represents the market for Ray Ban sunglasses, which are mass-produced and have many substitutes.
• Graph B, with inelastic supply, represents the market for original Michelangelo sculptures, which are unique and cannot be reproduced.

Final Answer