answer the following ......

1. Below are the demand schedule and the supply schedule for Gatorade sold by an SBVC campus club during a fundraiser. Demand Schedule uantity Demanded Supply Schedule Quantity Supplied (a) Use the Demand Schedule and Supply Schedule above to construct a Demand and Supply model. on the blank graph provided. Please label the demand curve and the supply curve. $3.00 $2.50 0 5 10152025 3035404550 Quantity (b) Suppose the club decides to set a price of $2.50 for Gatorade. Would this create a surplus in Gatorade or a shortage of Gatorade? How large is the surplus/shortage? (How large is the di'erenoe between Quantity Demanded and Quantity Supplied?) (c) What is the equilibrium price of Gatorade. What is the equilibrium quantity of Gatorade purchased? Suppose an increase in temperature increases the demand for Gatorade (when it is hot outside, the taste;r preference for a cold drink will change). The new demand schedule can be seen below. Demand Schedule Quantity Demanded 4 4 (d) Suppose the club does not change the price (so the equilibrium price you found in part c.) Would there he a surplus or a shortage of Gatorade? (e) Does this model predict the club increases or decreases the price of Gatorade as a result of the hotter temperature? (f) What is the new equilibrium price of Gatorade? What is the new equilibrium quantity sold? 2. Consider the market for popcorn sold at a large Cinemark movie theater. For each of the following scenarios select howr the change alfects supply and/or demand for popcorn on a Demand and Supply model. Additionally, select the eect on equilibrium price and quantity of popcorn sold at the theater. (a) The price of the articial butter avoring {an ingredient in the popcorn) decreases. (Remember, this question is about the supply} demand for popcorn) (1)) Suppose there is a decrease in the price of soda at the theater concession. (Hint: People tend to consume soda and popcorn together) (c) Suppose a consumption tax reform is passed which has two simultaneous impacts on the popcorn market. First, this increases the price of movie tickets, reducing the number of customers at the theater. At the same time, the increase in taxes directly increases the cost of selling popcorn. K K K Page 2