The demand and supply in the market for cheddar cheese (in pounds) is shown in the table below, where Qd0 and Qs0 are the initial quantity demanded and quantity supplied, respectively, for cheddar cheese: 1. Price per Pound $3.00 $3.20 Qdo Qd1 Qs0 540 Qs1 750 700 600 $3.40 $3.60 650 650 620 700 $3.80 $4.00 600 720 590 730 In this space, please illustrate the market for cheddar cheese, with both the supply curve and demand curve graphed on the same graph, making sure you label each component and put the correct variables on the x- and y-axis. a. The equilibrium price for cheddar cheese is $_ and the equilibrium quantity of cheddar cheese produced and sold in the market is. cartons. b. Now, consider this scenario: The price of milk, a key input for cheese production, rises, so that the quantity supplied for cheddar cheese decreases by 80 pounds at every price. Calculate this new information and add to the Qs1 column in the table above. Then, in the market for cheddar cheese illustrated above, draw your new supply curve with the price and Qs1 information, and label it S1. The new equilibrium price for cheddar cheese is $_ per pound and the new equilibrium quantity of cheddar cheese produced and sold is pounds of cheddar cheese.
The demand and supply in the market for cheddar cheese (in pounds) is shown in the table below, where Qd0 and Qs0 are the initial quantity demanded and quantity supplied, respectively, for cheddar cheese: 1. Price per Pound $3.00 $3.20 Qdo Qd1 Qs0 540 Qs1 750 700 600 $3.40 $3.60 650 650 620 700 $3.80 $4.00 600 720 590 730 In this space, please illustrate the market for cheddar cheese, with both the supply curve and demand curve graphed on the same graph, making sure you label each component and put the correct variables on the x- and y-axis. a. The equilibrium price for cheddar cheese is $_ and the equilibrium quantity of cheddar cheese produced and sold in the market is. cartons. b. Now, consider this scenario: The price of milk, a key input for cheese production, rises, so that the quantity supplied for cheddar cheese decreases by 80 pounds at every price. Calculate this new information and add to the Qs1 column in the table above. Then, in the market for cheddar cheese illustrated above, draw your new supply curve with the price and Qs1 information, and label it S1. The new equilibrium price for cheddar cheese is $_ per pound and the new equilibrium quantity of cheddar cheese produced and sold is pounds of cheddar cheese.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:1.
The demand and supply in the market for cheddar cheese (in pounds) is shown in the table below, where Qd0 and Qs0 are
the initial quantity demanded and quantity supplied, respectively, for cheddar cheese:
Price per Pound
$3.00
$3.20
Qdo
Qd1
Qs0
Qs1
750
540
700
600
$3.40
$3.60
650
650
620
700
$3.80
$4.00
600
720
590
730
In this space, please illustrate the market for cheddar cheese, with both the supply
curve and demand curve graphed on the same graph, making sure you label each
component and put the correct variables on the x- and y-axis.
The equilibrium price for cheddar cheese is $
and the equilibrium quantity of cheddar cheese produced and
a.
sold in the market is
cartons.
b.
Now, consider this scenario: The price of milk, a key input for cheese production, rises, so that the quantity supplied for
cheddar cheese decreases by 80 pounds at every price. Calculate this new information and add to the Qs1 column in the
table above. Then, in the market for cheddar cheese illustrated above, draw your new supply curve with the price and Qs1
information, and label it S1. The new equilibrium price for cheddar cheese is $
per pound and the new
equilibrium quantity of cheddar cheese produced and sold is
pounds of cheddar cheese.
Transcribed Image Text:c.
Now, consider this scenario: A new study says that eating cheese is good for your health, so that the quantity demanded
for cheddar cheese increases by 20% at every price. Calculate this new information and add to the Qd1 column in the table
above. Then, in the market for cheddar cheese illustrated above, draw a new demand curve with the price and Qd1
information, and label it D1. Using the intersection between D1 and SO, the new equilibrium price for cheddar cheese is
$.
per pound and the new equilibrium quantity of cheddar cheese produced and sold is
pounds of
cheddar cheese.
d.
Now, assume the scenarios outlined in 1b and 1c happened SIMULTANEOUSLY. If this happens, our new market
equilibrium for cheddar cheese would happen at the intersection between D1 and S1. If this is the case, will the new
equilibrium price for cheddar cheese in the market be higher or lower than the original equilibrium price found in la? Will
the new equilibrium quantity for cheddar cheese in the market be higher or lower than the original equilibrium quantity
found in 1a?
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