The demand and supply schedules for potato chips are:

PriceQDQS(mil bags/week)

(cents per bag)(millions

of bags/week)

50160130

60150140

70140150

80130160

90120170

100110180

a.Make a graph of the potato chip market and mark in the equilibrium price and quantity.

b.If the price is 60 a bag, is there a shortage or a surplus, and how does the price adjust?

Suppose a new dip increases the quantity of potato chips that people want to buy by 30

million bags per week at each price.

a. Does the demand for chips change? Does the supply of chips change? Describe the change.

b. How does the market equilibrium change?

c. If a virus destroys potato crops and the quantity of potato chips produced decreases by 40 million bags a week at each price, how does the supply of chips change?

d. If the virus hits just as the new dip comes to the market, how do the equilibrium price and quantity of chips change?