If the price of corn (used to make corn syrup) rises, then how do we expect the four prices to change? (Hint: you should focus first on the change in the price of corn syrup, and then consider how that change affects each of the other three prices. You can ignore how the other three prices affect each other.) Question 6 options: Price of cocoa. Price of sugar. Price of corn syrup. Price of chocolate. 1. Rise. 2. Fall. 3. No clear reason for the price to change.
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Suppose that farmers can grow either coffee beans and cocoa beans with their resources (these are substitutes in production), and that there is an increase in demand for coffee. What would we expect to happen in the market for cocoa beans, everything else remaining the same? Select all options that are correct. price of cocoa beans will fall and quantity demanded will increase supply curve for cocoa beans shifts downwards supply curve for cocoa beans shifts upwards price of cocoa beans will rise and quantity demanded will fall demand curve for cocoa beans shifts to the left demand curve for cocoa beans shifts to the right
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SUPPLY AND DEMAND QUESTIONS 1. Suppose that the price of sugar increases. What would happen to the 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 the 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)
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