Suppose that the price of sugar increases. What would happen to equilibrium price and quantity in...

Question

Suppose that the price of sugar increases. What would happen to equilibrium price and quantity in the market for Kit Kat chocolate? Explain your answer by making references to a Supply & Demand Curves that you have drawn and their Equilibriums.

2.Suppose that a company invents a better machine for mixing the ingredients to make chocolate candies, but the price of Cocoa rises while the price of sugar falls. What would happen to equilibrium price and quantity in the market for Milky Way chocolate?

3.Suppose the equation for demand can be expressed as P = 120 –1.25Q (P = Price of a good and Q is the Quantity of the good demanded). The equation for supply can be expressed as P = 1.75Q.

a.What is the Quantity Demanded at a Price of $80? (Show All Your Work)

b.Find the equilibrium price and quantity (Show All Your Work

Robert · Accepted Answer

1. Suppose that the price of sugar increases. What would happen to equilibrium price and quantity in the 
market for Kit Kat chocolate? Explain your answer by making references to a Supply & Demand 
Curves that you have drawn and their Equilibriums.
Sugar is the main ingredient in the manufacturing of Kit Kat chocolate. So, as the price of sugar 
increases, the cost will increase to the producers thereby, shifting the supply curve to the left. 
The equilibrium price will increase and the quantity will reduce.
 
2.

Suppose that the price of sugar increases. What would happen to equilibrium price and quantity in the market for Kit Kat chocolate? Explain your answer by making references to a Supply & Demand Curves...

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