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Identify the equilibrium price

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1. The market for sushi is currently in equilibrium. Use an appropriate graph to show this situation. Identify the equilibrium price (label this P1) and quantity (label it Q1). Be sure to label all axes and curves.

2. There has recently been an increase in the price of seaweed, an important ingredient (i.e. input) in making sushi. Show the effects of this change on your graph above. Label the new equilibrium price P2 and the new equilibrium quantity Q2. Again, be sure to label everything carefully.

3. Suppose that coffee and tea are substitutes. Given this fact, you would expect an increase in the price of coffee to cause the demand for tea to _________________ ((choose one: increase/decrease).

4. If the entire demand curve shifts, we refer to this as a change in _______________ (choose one: demand/quantity demanded).

Reference no: EM131191742

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