Suppose the market demand for a cup of cappuccino is given by Qd = 24-4p and the market
supply for a cup of cappuccino is given by Qs = 8P-12, where P = Price (per cup).
1. Graph the supply and demand schedules for cappuccinos
2.
What is the equilibrium price and equilibrium quantity?
3.
If the market price were to increase to $4, what would happen to the market for
cappuccinos? What would the difference be between quantity supplied and quantity
demanded?
4. If the market price were to fall to $2, what would happen to the market for
cappuccinos? What would the difference be between quantity supplied and quantity
demanded?
