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

Question

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

Quizplus · Accepted Answer

A premature frost that destroys half the coffee trees would significantly reduce the supply of coffee, leading to a decrease in the quantity available. This scarcity would increase the demand for the remaining coffee, pushing the price up to a new equilibrium where the quantity supplied equals the quantity demanded. The correct choice reflects a higher price and a reduced quantity compared to the original equilibrium, indicating the effects of a supply decrease.

Use the Figure Below to Answer the Following Questions