I, Preview File Edit View Go Tools Window Help ': , 39%[Iv Mon10138AM Q {6 Exercise 2.2 Firm Supply Exercisepdf (1 page) v EDvQQ Q Firm Supply Exercise (Ex. 2.2) S,, SI, and 5; represent three ofKrispy Kreme Donut's supply curves for donuts. Starting from point E, indicate which is the most likely movement in response to the specied changer Pr n u u! durum m 1/"me P: I. ml I'=IL 50 J "mm/x m lmr Useful Information Donuts and snack cakes are substitutes in production. Donuts and donut holes are joint products. With present technology, Krispy Kreme can make 100 donuts per hour. Donuts are made with sugar, our, water, an oven and labor. Sugar costs $1.00 per pound. Flour costs $0.50 per pound. Water costs 1 cents per gallon. Labor costs $5.00 per hour. The oven costs $2.00 per hour to run. Start each scenario at point B (on supply curve S2 at a price level of $0.50 per donut). Scenarios The price of sugar changes to $0.75 per pound: The price of snack cakes decreases: The price of donut holes decreases: The price of labor increases to $7.50: The price of snack cakes increases: The oven gets clogged with donut mix. As a result, only 75 donuts can be made per hour. The price of donut holes increases: The price of donuts increases: The price of donuts decreases