4. Market research has revealed the following information about the market for chocolate bars. Demand: QD = 1600 – 300P Supply: Q* = 1400 + 700P a) Calculate the equilibrium price and quantity in the market for chocolate bars.
4. Market research has revealed the following information about the market for chocolate bars. Demand: QD = 1600 – 300P Supply: Q* = 1400 + 700P a) Calculate the equilibrium price and quantity in the market for chocolate bars.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:4. Market research has revealed the following information
about the market for chocolate bars.
Demand:
QD = 1600 – 300P
Supply:
OS = 1400 + 700P
a) Calculate the equilibrium price and quantity in the
market for chocolate bars.
b) Say that in response to a major industry ad
campaign, the demand curve for chocolate bars
shifted to the right, represented by the equation:
QD = 1800 – 300P
What happens to the equilibrium price and quantity of
chocolate bars?
c) Returning to the original demand equation, say that
price of cocoa beans, a major ingredient in the
production of chocolate bars, increased because of a
drought in sub-Saharan Africa, a major producer of
cocoa, changing the supply curve to:
Q$ = 1100 + 700P
What happens to the equilibrium price and quantity?
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