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Unformatted text preview: 40 140 100 50 120 120 60 100 140 70 80 160 80 60 180 a. Draw a graph of the gum market and mark in the equilibrium price and quantity. b. Suppose that gum is 70 cents a pack. Describe the situation in the gum market and explain how the price of gum adjusts. c. Suppose that a fire destroys some gum-producing factories and the supply of gum decreases by 40 million packs a week. Has there been a shift of or a movement along the supply curve of gum? d. Has there been a shift of or a movement along the demand curve for gum? e. What are the new equilibrium price and equilibrium quantity of gum? f. Suppose an increase in the teenage population increases the demand for gum by 40 million packs per week at the same time as the fire occurs. What are the new equilibrium price and quantity of gum?...
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- Spring '11
- Supply And Demand