2. (LO 3) Figure 2.16 shows the market for large bags of potato chips.

S D

0 20 30 40 50 60 70 80 10 Quantity per week 0.50 0.00 1.00 1.50 2.00 3.00 2.50 Price ($)

FIGURE 2.16 Quantity per week Price per kilo ($)

0 18 20 22 24 26 28 30 32 0 20 40 60 80 100 120 140 160 S

D FIGURE 2.17

a) What is the equilibrium price and quantity?

Price: Quantity:

b) If the price is $2.25, is there a surplus or shortage of potato chips?

Surplus/shortage of units

c) If the price is $1.50, is there a surplus or shortage of potato chips?

Surplus/shortage of units