Please answer Not a gradeWas this change an increase or decrease? As a result did the equilibrium price and quanity increase of decrease? **Cups of Coffee Market Analysis***Graph Description:*The graph illustrates the relationship between the price and quantity of coffee cups in the market through supply and demand curves.- **Axes:** - The horizontal axis (X-axis) represents the quantity of coffee cups, ranging from 0 to 300. - The vertical axis (Y-axis) represents the price, ranging from $0 to $8.- **Curves:** - The **Supply Curve (S)** is shown in red. It slopes upwards from left to right, indicating that as the price increases, the quantity supplied also increases. - The **Demand Curve (D)** is shown in blue. It slopes downwards from left to right, indicating that as the price decreases, the quantity demanded increases.- **Equilibrium Point:** - The intersection point of the supply and demand curves is at a price of $5 and a quantity of 200 cups, which is the equilibrium point.*Table: Price and Quantity*| Price | Quantity ||-------|----------|| $3 | 400 || $4 | 350 || $5 | 300 || $6 | 250 || $7 | 200 |The table displays variations in quantity with changes in price, reflecting shifts in either supply or demand that might result in a new equilibrium.*Instruction:*Label the new equilibrium E1.This analysis of the coffee market demonstrates how prices can impact supply and demand, ultimately reaching an equilibrium that balances the two forces.

There is increase in demand if the demand curve shifts to right. There is decrease in demand when…

Answered: Was this change an increase or…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please answer Not a grade

Was this change an increase or decrease?

As a result did the equilibrium price and quanity increase of decrease?

**Cups of Coffee Market Analysis**

*Graph Description:*

The graph illustrates the relationship between the price and quantity of coffee cups in the market through supply and demand curves.

- **Axes:**
- The horizontal axis (X-axis) represents the quantity of coffee cups, ranging from 0 to 300.
- The vertical axis (Y-axis) represents the price, ranging from $0 to $8.

- **Curves:**
- The **Supply Curve (S)** is shown in red. It slopes upwards from left to right, indicating that as the price increases, the quantity supplied also increases.
- The **Demand Curve (D)** is shown in blue. It slopes downwards from left to right, indicating that as the price decreases, the quantity demanded increases.

- **Equilibrium Point:**
- The intersection point of the supply and demand curves is at a price of $5 and a quantity of 200 cups, which is the equilibrium point.

*Table: Price and Quantity*

| Price | Quantity |
|-------|----------|
| $3 | 400 |
| $4 | 350 |
| $5 | 300 |
| $6 | 250 |
| $7 | 200 |

The table displays variations in quantity with changes in price, reflecting shifts in either supply or demand that might result in a new equilibrium.

*Instruction:*

Label the new equilibrium E1.

This analysis of the coffee market demonstrates how prices can impact supply and demand, ultimately reaching an equilibrium that balances the two forces.

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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