Question
Fiona owns a food cart that she parks outside City College and cooks and sells burritos. Her burritos are a big hit among City College
Fiona owns a food cart that she parks outside City College and cooks and sells burritos. Her burritos are a big hit among City College students. For the following questions, provide answers with clear explanations and diagrams.
(a) Other food cart operators in that area band together and decide to drive Fiona out of business by jointly reducing their prices. Left with no choice Fiona decided to drop her price from $6 a burrito to $4.50. What impact will this price drop have on Fiona's burrito supply?
(b) After having dropped her price, Fiona discovers that she can purchase tortillas in bulk from a supplier in Queens at a much lower price than her current supplier. She decides to switch suppliers. How will this change her supply curve?
(c) In the summer months, there is a drastic decline in the student population in that area. Does this have an impact on the supply curve?
(d) With all this success in her business, Fiona decides to buy two more food carts like her original one. Show the impact of this on the burrito supply in that
area.
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