Homework answers / question archive / After several years of decline, the market for handmade acoustic guitars is making a comeback

After several years of decline, the market for handmade acoustic guitars is making a comeback

Economics

Share With

After several years of decline, the market for handmade acoustic guitars is making a comeback. These guitars are usually made in small workshops employing relatively few highly skilled luthiers. Assess the impact on the demand, supply, equilibrium price and quantity of handmade acoustic guitars as a result of each of the following events. In your answers indicate which curve(s) shift(s) and in which direction.

a. Environmentalists succeed in having the use of Brazilian rosewood banned in the United States, forcing luthiers to seek out alternative, more costly woods.

b. A foreign producer reengineers the guitar making process and floods the market with identical guitars.

c. Music featuring handmade acoustic guitars makes a comeback as audiences tire of heavy metal and grunge music.

d. The country goes into a deep recession and the income of the average American falls sharply.