the table sets out the demand and supply schedules for potato chips.\nprice (cents per bag) quantity…

the table sets out the demand and supply schedules for potato chips.\nprice (cents per bag) quantity demanded (millions of bags per week) quantity supplied (millions of bags per week)\n50 160 130\n70 140 150\n80 130 160\nusing this data, draw the demand and supply curves. label them.\ndraw a point at the market equilibrium.\ndraw an arrow at the price of 60 cents to show the shortage or surplus at that price. label it.\nif the price is 60¢ a bag, how does the market price adjust to return to equilibrium?\nto return to market equilibrium, ______.\na. the quantity demanded decreases and the quantity supplied increases as the price rises\nb. demand decreases and supply increases as the price rises\nc. demand increases and supply decreases as the price rises\nd. the quantity demanded increases and the quantity supplied decreases as the price falls

the table sets out the demand and supply schedules for potato chips.\nprice (cents per bag) quantity demanded (millions of bags per week) quantity supplied (millions of bags per week)\n50 160 130\n70 140 150\n80 130 160\nusing this data, draw the demand and supply curves. label them.\ndraw a point at the market equilibrium.\ndraw an arrow at the price of 60 cents to show the shortage or surplus at that price. label it.\nif the price is 60¢ a bag, how does the market price adjust to return to equilibrium?\nto return to market equilibrium, ______.\na. the quantity demanded decreases and the quantity supplied increases as the price rises\nb. demand decreases and supply increases as the price rises\nc. demand increases and supply decreases as the price rises\nd. the quantity demanded increases and the quantity supplied decreases as the price falls

Answer

Explanation:

Step1: Understand market - equilibrium concept

At equilibrium, quantity demanded equals quantity supplied.

Step2: Analyze shortage/surplus at 60 cents

We don't have data for 60 cents directly, but we know the relationship between demand and supply at 50 and 70 cents. As price rises from 50 cents (where demand > supply) to 70 cents (where supply > demand), at 60 cents, demand is likely still greater than supply, so there is a shortage.

Step3: Determine price - adjustment mechanism

When there is a shortage, the price rises. As the price rises, according to the law of demand, the quantity demanded decreases, and according to the law of supply, the quantity supplied increases until equilibrium is reached.

Answer:

A. the quantity demanded decreases and the quantity supplied increases as the price rises