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.

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Chapter1: Making Economics Decisions
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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?
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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