Price (dollars par bar 3.00 2.50 2.00 1.50 1.00 0.50 0 Supply of energy bars (original) 5 25 30 35 Quantity (millions of bars per week) Based upon the above graph, answer the following questions Supply of energy bars (new) 10 15 20 Demand for energy bars
Price (dollars par bar 3.00 2.50 2.00 1.50 1.00 0.50 0 Supply of energy bars (original) 5 25 30 35 Quantity (millions of bars per week) Based upon the above graph, answer the following questions Supply of energy bars (new) 10 15 20 Demand for energy bars
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:**Graph Analysis and Discussion**
This graph illustrates the supply and demand curves for energy bars. On the vertical axis, we have the "Price (dollars per bar)" ranging from $0.50 to above $2.50. The horizontal axis shows the "Quantity (millions of bars per week)" from 0 to 35.
**Explanation of the Graph:**
- **Demand Curve (Blue):** Shows the inverse relationship between price and quantity demanded for energy bars, following the law of demand.
- **Supply Curve (Original) (Black):** Indicates the initial direct relationship between price and quantity supplied.
- **Supply Curve (New) (Red):** Represents a shift in the supply curve to the right, suggesting an increase in supply.
**Observations:**
- The intersection of the original supply and demand curves indicates the initial equilibrium point, where supply equals demand.
- The rightward shift of the supply curve suggests an increased supply at various prices.
- New equilibrium is established at a lower price and higher quantity where the new supply curve intersects the demand curve.
**Questions Based on the Graph:**
A) The shift in supply to the right represents a(n) __________ in supply and the new equilibrium quantity is __________.
B) Based on your answer to A, name two factors that may have caused the change in supply.
C) Would this occurrence result in a surplus or shortage of energy bars? Explain why.
These questions require analyzing the changes in equilibrium due to shifts in supply and understanding the resulting market dynamics.
Expert Solution
Step 1
Quantity supplied in economics refers to the volume of goods or services that suppliers will make an offer for sale at a specific market price. Since price variations affect how much supply manufacturers put on the market, the quantity supplied differs from the amount of supply that is available.
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education