Consider the following supply and demand picture of the market for Oreos. Note that the market is currently in equilibrium, with a price of P* and a quantity exchanged of Q*. For each of the scenarios below, draw a picture that illustrates the impact on price and quantity exchanged. Explain each of your pictures by describing what is happening to the supply side of the market.
(a) The price of Hydrox cookies goes down.
(b) Due to a disastrous growing season, the price of cocoa triples.

Question

Consider the following supply and demand picture of the market for Oreos. Note that the market is currently in equilibrium, with a price of P* and a quantity exchanged of Q*.  For each of the scenarios below, draw a picture that illustrates the impact on price and quantity exchanged. Explain each of your pictures by describing what is happening to the supply side of the market.
(a) The price of Hydrox cookies goes down.
(b) Due to a disastrous growing season, the price of cocoa triples.

Quizplus · Accepted Answer

The Answer of Consider the following supply and demand picture of the market for Oreos. Note that the market is currently in equilibrium, with a price of P* and a quantity exchanged of Q*.  For each of the scenarios below, draw a picture that illustrates the impact on price and quantity exchanged. Explain each of your pictures by describing what is happening to the supply side of the market.
(a) The price of Hydrox cookies goes down.
(b) Due to a disastrous growing season, the price of cocoa triples.

Consider the Following Supply and Demand Picture of the Market