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. **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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Answered: Suppose the quantity supplied falls,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

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 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.

**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.

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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