In the market for chewing gum, the current price is 50 cents per pack and 100,000 packs are sold.Which event would lead to a new equilibrium price of 60 cents and quantity of 90,000 packs?

Question

In the market for chewing gum, the current price is 50 cents per pack and 100,000 packs are sold.Which event would lead to a new equilibrium price of 60 cents and quantity of 90,000 packs?

Quizplus · Accepted Answer

An increase in the price of ingredients used to make chewing gum would lead to an increase in the cost of producing each pack of gum, causing the supply to decrease, resulting in a new equilibrium price of 60 cents and a quantity of 90,000 packs. The other options would not directly affect the demand or supply of chewing gum, so they would not lead to a change in the equilibrium price and quantity.

In the Market for Chewing Gum, the Current Price Is