Outline why the change in the market for processing potatoes identified in part (b) islikely to affect the market for frozen fries

Explain how the price mechanism would impact both producers and consumers to returnthe market for frozen fries to equilibrium.

Owners of family restaurants have reacted to changes in the market for frozen fries in differentways. Some are making their own fries from table potatoes (which are less suitable for fries) andothers have reduced their serving sizes. Both responses have led to a decrease in the frequencyof consumers eating out. Some owners have even been forced to close their restaurants due to areduced number of customers.(e) Explain the likely effects of the changes in the market for frozen fries on the market for mealsat family restaurants. Complete the diagram below to support your answer

page 6 of 10Source CConsumers who purchase frozen fries from supermarkets have also been affected by the changesin the market for frozen fries. Supermarket Chain 1, one of Country A’s two supermarket chains,has chosen to hold the price of frozen fries at P1 and has also set buyer limits to help availabilityand affordability for customers.(f ) (i) Use the following diagram to identify the impact on both consumer surplus and producersurplus of Supermarket Chain 1’s decision to hold prices at P1. Write your answer in thetable below.Market for frozen fries at supermarket chainsPP2PeP1 P1Sab cd e f gh i j k l DQQ 2Q eQ 1Consumer surplus if price is Pe Consumer surplus if price is P1Producer surplus if price is Pe Producer surplus if price is P1

Explain the impact of an increase in the price of frozen fries from P0 to P1 on the totalrevenue of processors of frozen fries. Refer to the diagram below in your answer.Demand for frozen fries from family restaurantsQQ 1 Q 0PP1P0abdce f D_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ (3 marks)

Which of the following scenarios would likely shift the supply curve for potatoes to the right (increase in supply)?multiple choiceTeenagers in potato-farming towns leave to go to college.The price of fertilizer increases.Potato growers expect the price of potatoes to be lower this year than last year.A new harvester enables farmers to bring in ripe potatoes twice as fast as they did before.