the graph shows the demand for and supply of potato chips. draw a curve that shows the effect of a new dip…

the graph shows the demand for and supply of potato chips. draw a curve that shows the effect of a new dip that increases the quantity of potato chips that people want to buy by 40 million bags per week at each price. label the curve 1. draw a curve that shows the effect of a virus that destroys potato crops and decreases the quantity of potato chips produced by 20 million bags a week at each price. label the curve 2. draw a point at the new equilibrium price and quantity following both events. how do the equilibrium price and equilibrium quantity change when the increase in demand is greater than the decrease in supply? the equilibrium price ______ and the equilibrium quantity ______. a. falls; decreases b. falls; increases c. rises; decreases d. rises; increases how do the equilibrium price and equilibrium quantity change when the increase in demand is less than the decrease in supply? the equilibrium price ______ and the equilibrium quantity ______. a. falls; increases b. rises; decreases c. rises; increases d. falls; decreases how do the equilibrium price and equilibrium quantity change when the increase in demand equals the decrease in supply? the equilibrium price ______ and the equilibrium quantity ______. a. rises; remains unchanged b. rises; increases c. falls; remains unchanged d. rises; either increases or decreases

the graph shows the demand for and supply of potato chips. draw a curve that shows the effect of a new dip that increases the quantity of potato chips that people want to buy by 40 million bags per week at each price. label the curve 1. draw a curve that shows the effect of a virus that destroys potato crops and decreases the quantity of potato chips produced by 20 million bags a week at each price. label the curve 2. draw a point at the new equilibrium price and quantity following both events. how do the equilibrium price and equilibrium quantity change when the increase in demand is greater than the decrease in supply? the equilibrium price ______ and the equilibrium quantity ______. a. falls; decreases b. falls; increases c. rises; decreases d. rises; increases how do the equilibrium price and equilibrium quantity change when the increase in demand is less than the decrease in supply? the equilibrium price ______ and the equilibrium quantity ______. a. falls; increases b. rises; decreases c. rises; increases d. falls; decreases how do the equilibrium price and equilibrium quantity change when the increase in demand equals the decrease in supply? the equilibrium price ______ and the equilibrium quantity ______. a. rises; remains unchanged b. rises; increases c. falls; remains unchanged d. rises; either increases or decreases

Answer

Brief Explanations:

When the increase in demand is greater than the decrease in supply, more people want to buy and less is being supplied relatively. This causes competition among buyers, driving up the price and also increasing the quantity traded as the higher - price encourages more production. When the increase in demand is less than the decrease in supply, there is less available and still some demand, so the price rises but the quantity traded decreases. When the increase in demand equals the decrease in supply, the price rises due to the overall upward pressure on price from the combined shifts, but the quantity remains unchanged as the opposing effects on quantity cancel out.

Answer:

  1. D. rises; increases
  2. B. rises; decreases
  3. A. rises; remains unchanged