Please help with the following practice homework. Show calculation or explain.

644-Q1

A recent study found that the demand and supply schedules for hot chocolate are as follows:

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 the price? Show this on a separate labeled graph. Label only the points on the graph pertinent to the question.
• List two reasons why this adjustment might not happen "immediately".