Unit 2: Supply and Demand

The market for organic milk has the following supply and demand schedules.

GreenBean Coffee Shop raises the price of its large latte from [math]6. As a result, the quantity demanded decreases from 200 to 120 per week. At the same time, a nearby bakery notices its pastry sales drop from 150 to 130 per week.

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The market for avocados is initially in equilibrium. Consider the following events: Event 1: A drought destroys a significant portion of the avocado crop. Event 2: A popular health study reports that avocados greatly reduce cholesterol levels.

The market for gasoline is in equilibrium at a price of [math]1.00 per-gallon excise tax on producers. After the tax, the price paid by consumers rises to $3.60 and the quantity traded falls to 80 million gallons.

The apartment rental market in the city of Millville is in equilibrium at a rent of [math]800 per month. At $800, the quantity demanded is 14,000 and the quantity supplied is 6,000.