Exercise 5

Suppose the demand and supply schedules fare as follows

Price
cents per pack
Quantity demanded
millions of packs / week
Quantity supplied
millions of packs / week
10 200 0
20 180 30
30 160 60
40 140 90
50 120 120
60 100 140
70 80 160
80 60 180
90 40 200

An increase in the teenage population increases the demand for gum by 40 million packs per week.


The new demand schedule

Price
cents per pack
Quantity demanded
millions of packs / week
Quantity supplied
millions of packs / week
10 240 0
20 220 30
30 200 60
40 180 90
50 160 120
60 140 140
70 120 160
80 100 180
90 80 200