The table shows the demand and supply schedules for milk. A drought decreases the quantity...

Question:

The table shows the demand and supply schedules for milk.

Price (Dollars per Carton) Quantity Demanded (Cartons per Day) Quantity Supplied (Cartons per Day)
1.30 200 170
1.55 180 180
1.80 160 190
2.05 140 200
2.30 120 210

A drought decreases the quantity supplied by 30 cartons a day at each price.

1) At the initial equilibrium price, will there be a shortage or surplus of milk?

2) Will the price of a carton rise or fall?

3) Will the number of cartons demanded increase or decrease as the market moves to the new equilibrium?

The Demand and Supply Schedules:

The Demand Schedule Shows The Association Between The Quantity Demanded And The Price. On The other hand, the supply schedule demonstrates a correlation between the quantity supplied and the price.

Answer and Explanation:

Price (Dollars per Carton) Quantity Demanded (Cartons per Day) Quantity Supplied (Cartons per Day) New Quantity Supplied (Cartons per Day)
1.30 200 1...

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Market Supply & Demand Schedules

from CLEP Social Sciences and History: Study Guide & Test Prep

Chapter 58 / Lesson 1
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