1. Consider the following demand/supply schedules for Whey Protein Powder, used to build muscle in weight training...

Price (P)................Quantity demanded..................Quantity Supplied................Surplus/Shortage

($/Pound) (Pounds/month) (Pounds/month)

40.00.................................0.............................................. 600

35.00...............................100.............................................500

30.00............................... 200............................................400

25.00................................300............................................300

20.00.................................400...........................................200

15.00..................................500...........................................100

10.00..................................600..............................................0

Questions:

1-Draw a diagram of the market for Whey protein powder, showing the demand and supply curves.

2-What is the equilibrium price and quantity of Whey powder exchanged in the market?

3-Suppose that the local health store decides to charge $20 per pound for Whey powder? Is there a surplus or shortage at this price? Explain. How would the market price adjust as a result?

4-Explain how each of the following changes would affect either the demand side or supply side of Whey protein powder. Draw a separate diagram for each case and show the effect on equilibrium price and quantity...

a-There is an increase in income (all else equal)

b-The price of whey, used to produce the protein powder, increases (all else equal)

c-Gyms reopen after Covid-19 is under control (all else equal)

d-There's a decrease in the price of Soy protein powder, a substitute in consumption for Whey protein powder (all else equal)

e-There's an increase in the price of whey protein powder (all else equal)