Exercise 6

The demand and supply schedule for gum are 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

Now an increase in teenage population increases the demand for gum by 40 million packs per week and simultaneously the fire wipes out half of the gum-producing factories.


After the fire and the increase in population:

Price
cents per pack
Quantity demanded
millions of packs / week
Quantity supplied
millions of packs / week
10 240 0
20 220 15
30 200 30
40 180 45
50 160 60
60 140 70
70 120 80
80 100 90
81 98 91
82 96 92
83 94 93
84 92 94
85 90 95
86 88 96
87 86 97
88 84 98
89 82 99
90 80 100