Question: Draw the graph for the supply and demand model for pencils (follow the directions listed above). Assume that the equilibrium price equals $10 per box

Draw the graph for the supply and demand model for pencils (follow the directions listed above). Assume that the equilibrium price equals $10 per box of pencils and the equilibrium quantity is 120 boxes.

A. Imagine that the price somehow, temporarily, were $12 instead of the equilibrium price of $10. SHOW on the graph the quantity supplied and quantity demanded at this $12 price. Label these two quantities on the horizontal axis.Is there a surplus? A shortage?Describe the "natural market forces" mechanism by which equilibrium would be restored.

B. Answer this part of the question ignoring (A) above. Imagine that there is an increase in average family income. How would this affect the graph? Show and explain in words.Show any shift of any curve(s) and label any change in equilibrium price and quantity. Explain carefully

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