Question: 1. A recent study found that the demand and supply schedules for hot chocolate are as follows: Price Price Quantity Demanded Per Month Quantity Supplied

1. A recent study found that the demand and supply schedules for hot chocolate are as follows:

Price

Price Quantity Demanded Per Month Quantity Supplied Per Month

$5 6,000 10,000

$4 8,000 8,000

$3 10,000 6,000

$2 12,000 4,000

$1 14,000 2,000

a.What are the equilibrium price and quantity for hot chocolate?

b.Suppose the price is currently $5.What problem would exist in the market, in no more than a single sentence?What would you expect to happen to price?Show this on a separate labeled graph. You need only label the points on the graph pertinent to the question. List two reasons why this adjustment might not happen "immediately".

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