Suppose we are analyzing the market for hot chocolate. Graphically illustrate the impact each of the following would have on demand or supply. Also show how equilibrium price and quantity have changed. Consumer income falls because of a recession and hot chocolate is considered a normal good. Producers expect the price of hot chocolate to increase next month. Currently, the price of hot chocolate is $0.50 per cup above equilibrium

Microeconomics
13th Edition
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter3: Supply And Demand: Theory
Section: Chapter Questions
Problem 8WNG
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Suppose we are analyzing the market for hot chocolate. Graphically illustrate the impact each of the following would have on demand or supply. Also show how equilibrium price and quantity have changed.

  1. Consumer income falls because of a recession and hot chocolate is considered a normal good.
  2. Producers expect the price of hot chocolate to increase next month.
  3. Currently, the price of hot chocolate is $0.50 per cup above equilibrium.
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