Suppose the quantity supplied falls, relative to the values given in the table above, by 20 million pounds per month at prices above $5; at a price of $5 or less per pound, the quantity supplied becomes zero. Draw the new supply curve and show the new equilibrium price and quantity.
Suppose the quantity supplied falls, relative to the values given in the table above, by 20 million pounds per month at prices above $5; at a price of $5 or less per pound, the quantity supplied becomes zero. Draw the new supply curve and show the new equilibrium price and quantity.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose the quantity supplied falls, relative to the values given in the table above, by 20 million pounds per month at prices above $5; at a
Transcribed Image Text:**Title: Understanding Coffee Demand and Supply**
**Description:**
This section explores the model of demand and supply for coffee, as discussed in the hypothetical "Figure 3.10: Changes in Demand and Supply." Below, a table illustrates the initial demand and supply curves using specified values. These represent quantities in millions of pounds of coffee per month.
**Table:**
| **Price** | **Quantity Demanded** | **Quantity Supplied** |
|-----------|-----------------------|-----------------------|
| $3 | 40 | 10 |
| $4 | 35 | 15 |
| $5 | 30 | 20 |
| $6 | 25 | 25 |
| $7 | 20 | 30 |
| $8 | 15 | 35 |
| $9 | 10 | 40 |
**Explanation:**
The table above can be used to graph demand and supply curves. As the price of coffee increases from $3 to $9, the quantity demanded decreases from 40 million to 10 million pounds, while the quantity supplied increases from 10 million to 40 million pounds. The point where quantity demanded equals quantity supplied is the equilibrium point, at $6 in this case, where both are 25 million pounds.
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