Question: In Problem, if a virus destroys potato crops and the quantity of potato chips produced decreases by 40 million bags a week at each price, how does the supply of chips change?
Problem: The demand and supply schedules for potato chips are:
Price (cents per bag) Quantity demanded Quantity supplied
(millions of bags per week)
50 160 130
60 150 140
70 140 150
80 130 160
90 120 170
100 110 180
a. Draw a graph of the potato chip market and mark in the equilibrium price and quantity.
b. If the price is 60¢ a bag, is there a shortage or a surplus, and how does the price adjust?