Answer to Question #190006 in Microeconomics for Maryam Aliyu

Question

The demand and supply schedule for potato chips are 

 

Price

Quantity Demanded

Quantity Supplied

50

1600

1300

60

1500

1400

70

1400

1500

80

1300

1600

90

1200

1700

100

1100

1800

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

b) If the price is 60 cents a bag, is there a shortage or surplus in the market? How does the price will adjust?

Answer 1

If p=60, will be a shortage in the market 1500-1400=100