Summer 2018-EC02023-Principles of Economics 1-01437 Kayla Test: Midterm Exam Par

Question

Summer 2018-EC02023-Principles of Economics 1-01437 Kayla Test: Midterm Exam Part 1 (Modules 1 & 2) Next Question Time R This Question: 1 pt T of 13 (8 complete) A The table shows the demand and supply schedules for bread Excelent weather in wheat growing areas Increases the quanitity supplied by 225 loaves a day at each price l the iniial equlibrium price, there is of of a loat Quantity Qstity demanded supplied elbread The price of aloof-_ andthe qanty of loaves demanded _ ash markct moves to its new eium O A surpus, rises, decreases O B shartage, alls, ncreases 1.35 1.70 2.06 2 40 750 600 450 300 75 150 225 300 375 O C. surpus, rises; increases O D. shortage, rises, decreases O E. suphs, fals, increases The new equlltium price i a loaf and the new eqiltium quantity is loaves a day Clck to select your answers Type here to search

Explanation / Answer

Right answer is (E)

Increase in supply will create surplus of supply, hence price shall fall. Fall in price will lead to increase in demand for product.

New equilibrium price is $ 2.05 a leaf and the new equilibrium quantity is 450 leaves a day

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