Table 1 below sets out the demand and supply schedules for milk. Price (ringgit per cartoon) Quantity Demanded Quantity Supplied (Cartons per day) 200 1.00 110 1.25 1.50 1.75 2.00 175 130 150 125 100 Table 1 150 170 190 a) What are the equilibrium price and equilibrium quantity for milk? b) Describe the situation in the milk market if the price were RM1.75 a carton and explain how the market reaches equilibrium. c) A drought decreases the quantity supplied by 45 cartons a day at each price. What is the new equilibrium and how does the market adjust to it?

Table 1 below sets out the demand and supply schedules for milk. Price (ringgit per cartoon) Quantity Demanded Quantity Supplied (Cartons per day) 200 1.00 110 1.25 1.50 1.75 2.00 175 130 150 125 100 Table 1 150 170 190 a) What are the equilibrium price and equilibrium quantity for milk? b) Describe the situation in the milk market if the price were RM1.75 a carton and explain how the market reaches equilibrium. c) A drought decreases the quantity supplied by 45 cartons a day at each price. What is the new equilibrium and how does the market adjust to it?

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 8PA

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