Question

The Wonka chocolate bar market can be represented using the supply and demand equations below.

?? =587.5−50? ?? =500?−375

a) Find the price and quantity intercepts for the demand curve.

b) Find the price intercept for the supply curve. (note: no need to solve for the quantity intercept)

c) Find the equilibrium price and quantity for Wonka chocolate bars.

d) Using the supply and demand graph, show the following items: demand intercepts, supply intercept, and the market equilibrium. Make sure the graph is labeled appropriately. e) Explain what would happen to the market if the price of a Wonka bar was set at ? = 3. Surplus or shortage. Calculate excess demand or supply.

Answer 1