The supply and demand curves for apples are given below.
P=Q+2(SUPPLY CURVE)
P=14- 1/2 Q (DEMAND CURVE)
1.Graph the market for apples.
2. Determine the equilibrium price and quantiy..
3. Calculate consumer surplus.
4. SHOCK !The supply curve to P =Q+5 . Graph the shift. What is possible cause of this shift?
a. there is a sudden increase in population
b. the price of apples goes down
c. there is a drought
d. robots start picking apples(they are really good and do not have to be paid)
5. determine the new equilibrium. How have equilibrium price and quantiy changed?
6. calculate new consumer surplus. Are consumers better off or worse off after the shock?