Question
1. A recent study found that the demand and supply schedules for hot chocolate are as follows: Price Price Quantity Demanded Per Month Quantity Supplied
1. A recent study found that the demand and supply schedules for hot chocolate are as follows:
Price
Price Quantity Demanded Per Month Quantity Supplied Per Month
$5 6,000 10,000
$4 8,000 8,000
$3 10,000 6,000
$2 12,000 4,000
$1 14,000 2,000
a.What are the equilibrium price and quantity for hot chocolate?
b.Suppose the price is currently $5.What problem would exist in the market, in no more than a single sentence?What would you expect to happen to price?Show this on a separate labeled graph. You need only label the points on the graph pertinent to the question. List two reasons why this adjustment might not happen "immediately".
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