This is the market for HOT CHOCOLATE, which is a normal good and is produced with cocoa beans. We know that hot tea is a substitute for hot chocolate and whipped cream is a complement. Quantity Surplus or Price Quantity Supplied Demanded Shortage $5 6,000 10,000 $4 8,000 8,000 $3 10,000 6,000 $2 12,000 4,000 $1 14,000 2,000 1. Complete the table above finding a Shortage or a Surplus. Draw a graphical illustration of the market and find the equilibrium price and equilibrium quantity. For the remaining questions, explain by words or show graphically how equilibrium price and equilibrium quantity of hot chocolate would change (due to changes in Supply or Demand) if: 2. The price of cocoa beans falls; 3. The price of tea falls;
This is the market for HOT CHOCOLATE, which is a normal good and is produced with cocoa beans. We know that hot tea is a substitute for hot chocolate and whipped cream is a complement. Quantity Surplus or Price Quantity Supplied Demanded Shortage $5 6,000 10,000 $4 8,000 8,000 $3 10,000 6,000 $2 12,000 4,000 $1 14,000 2,000 1. Complete the table above finding a Shortage or a Surplus. Draw a graphical illustration of the market and find the equilibrium price and equilibrium quantity. For the remaining questions, explain by words or show graphically how equilibrium price and equilibrium quantity of hot chocolate would change (due to changes in Supply or Demand) if: 2. The price of cocoa beans falls; 3. The price of tea falls;
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:This is the market for HOT CHOCOLATE, which is a normal good and is
produced with cocoa beans. We know that hot tea is a substitute for hot
chocolate and whipped cream is a complement.
Quantity
Surplus or
Price
Quantity Supplied
Demanded
Shortage
$5
6,000
10,000
$4
8,000
8,000
$3
10,000
6,000
$2
12,000
4,000
$1
14,000
2,000
1. Complete the table above finding a Shortage or a Surplus. Draw a graphical
illustration of the market and find the equilibrium price and equilibrium quantity.
For the remaining questions, explain by words or show graphically how
equilibrium price and equilibrium quantity of hot chocolate would change (due
to changes in Supply or Demand) if:
2. The price of cocoa beans falls;
3. The price of tea falls;
4. Consumer income falls because of a recession.
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4. Consumer income falls because of a recession
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