Consider the following supply and demand diagram for Tootsie Rolls.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 demand side of the market.
(a) The American Association of Chocolate Lovers designates the Tootsie Roll as its official candy.
(b) The Tootsie Roll Company computerizes their Tootsie Roll manufacturing plant, lowering unit costs of production.

Question

Consider the following supply and demand diagram for Tootsie Rolls.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 demand side of the market.
(a) The American Association of Chocolate Lovers designates the Tootsie Roll as its official candy.
(b) The Tootsie Roll Company computerizes their Tootsie Roll manufacturing plant, lowering unit costs of production.

Quizplus · Accepted Answer

The Answer of Consider the following supply and demand diagram for Tootsie Rolls.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 demand side of the market.
(a) The American Association of Chocolate Lovers designates the Tootsie Roll as its official candy.
(b) The Tootsie Roll Company computerizes their Tootsie Roll manufacturing plant, lowering unit costs of production.

Consider the Following Supply and Demand Diagram for Tootsie Rolls