Rise in price and supply.

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Chapter 3, Problem 16APA

(a)

To determine

Rise in price and supply.

(b)

To determine

Rise in price and supply.

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Table 3.9 illustrates the market's demand and supply for cheddar cheese. Graph the data and find the equilibrium. Next, create a table showing the change in quantity demanded or quantity supplied, and a graph of the new equilibrium, in each of the following situations: a. The price of milk, a key input for cheese production, rises, so that the supply decreases by 80 pounds at every price. b. A new study says that eating cheese is good for your health, so that demand increases by 20% at every price. Price per Pound $3.00 $3.20 $3.40 $3.60 TABLE 3.9 I Qd Qs 750 540 700 600 650 650 620 700

55. Table 3.9 illustrates the market's demand and supply for cheddar cheese. Graph the data and find the equilibrium. Next, create a table showing the change in quantity demanded or quantity supplied, and a graph of the new equilibrium, in each of the following situations: a. The price of milk, a key input for cheese production, rises, so that the supply decreases by 80 pounds at every price. b. A new study says that eating cheese is good for your health, so that demand increases by 20% at every price. Price per Pound Qd Qs $3.00 750 540 $3.20 700 600 $3.40 650 650 $3.60 620 700 $3.80 600 720 $4.00 590 730

c. More computers are produced and sold at the lower price than at the higher price. Does this mean the price effect doesn't apply to the supply of computers? Explain.