Using properly labelled diagrams illustrate what will happen to the equilibrium price and quantity of muesli (ceteris paribus), in the followingscenarios

Question

1. Research has shown that muesli is good for the heart

 

2. The ongoing drought has affected grain (one of the ingredients for muesli) production. 

Answer 1

Well, we need a table of data for the supply and the demand. We can then calculate the trend line that fits the data, which will give us the equilibrium price and quantity.

 

However, since the needed ingredient is now in short supply, less of the product will be manufactured and 

produced, leading to a smaller supply to meet the demand. The vendors will raise the price.