Suppose that the supply of lemonade is represented by QS = 40P, where Q is measured in pints and P is measured in cents per pint.
If the demand for lemonade is QD = 5,000 – 10P, what are the current equilibrium price and quantity?
The current equilibrium price is
The current equilibrium quantity is
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Suppose that a severe frost in Florida raises the price of lemons and thus the cost of making lemonade. In response to the increase in cost, producers reduce the quantity supplied of lemonade by 400 pints at every price. What is the new equation for the supply of lemonade (denoted QS2)?
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After the frost, the demand for lemonade is QD = 5,000 – 10P, and the supply of lemonade is QS2 = 40P – 400. What will be the equilibrium price and quantity of lemonade?
The equilibrium price will be
The equilibrium quantity will be
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