Use the Figure Below to Answer the Following Questions

question 143

Multiple Choice

Use the figure below to answer the following questions.
Table 3.5.2
Demand and Supply Schedules for Cups of Coffee each day at CoolU

-Refer to Table 3.5.2.A premature frost destroys half the coffee trees and the supply of coffee is cut in half.The new equilibrium price is $________ and the new equilibrium quantity is ________ cups a day.

• A)1.30;600
• B)1.50;400
• C)0.90;400
• D)1.20;700
• E)1.30;500

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Definitions:

Cartons

Containers usually made of paperboard or cardboard used for storing and transporting goods.

Income Elasticity

The degree to which consumer demand for a product shifts following alterations in their financial earnings.

Inferior

A type of good for which demand decreases as the income of consumers increases.

Normal Good

A good whose demand increases as the income of consumers increases, and vice versa.