The table shows the demand supply schedules for candy. A rise in income increase

Question

The table shows the demand supply schedules for candy. A rise in income increases the quantity demanded by 2.000 bags a day at each price. At the initial equilibrium price, there is a of candy. The price of a bag and the quantity of bags supplied as the market moves to its new equilibrium. surplus; falls; decreases shortage; rises, increases surplus; rises; decreases shortage; rises; decreases shortage; falls; increases The new equilibrium price is a bag and the new equilibrium quantity bags a day.

Explanation / Answer

1. B. Shortage; rises; increases

2. The new equilibrium price is $3.00 a bag and the new equilibrium quantity is 3750 bag a day.

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