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Assume a natural disaster has destroyed some factories that produce candies and the quantity of candies supplied decreases by 20 million packs a week at each price.
|
Price ($ per pack) |
Quantity Demanded (millions of pack a week) |
Quantity Supplied (millions of pack a week) |
|
$1 |
70 |
30 |
|
$2 |
60 |
40 |
|
$3 |
50 |
50 |
|
$4 |
40 |
60 |
|
$5 |
30 |
70 |
|
$6 |
20 |
80 |
(a) Assume a natural disaster has destroyed some factories that produce candies and the quantity of candies supplied decreases by 20 million packs a week at each price. Explain what happens in the market for candies and draw a graph to illustrate the changes.
(a) Based on your answer in (a), if, at the time as the natural disaster the teenage population increases, and the quantity of candies demanded increases 20 million packs a week at each price. What is the new market equilibrium? Draw a graph to show the changes.
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