Final answer:
The question pertains to determining the equilibrium point in the flavored water market using provided supply and demand functions. It involves understanding how the quantity supplied and quantity demanded react to changes in price, leading to market equilibrium or surplus situations.
Step-by-step explanation:
The question given is focused on determining how the market for flavored water functions based on its supply and demand curves. Given the supply function (Qs = 50 + 7p) and the demand function (Qd = 98 - 9p), where Q stands for the quantity and p stands for price (per bottle), we can analyze how much product firms are willing to provide at different price levels, which is called the quantity supplied. The law of supply indicates that suppliers will want to supply more as the price increases, as highlighted by Caroline Krafft's discussion on the supply of wheat flour. Conversely, the quantity demanded will decrease as the price increases, reflecting consumer behavior to use less of a product when it is more expensive, as illustrated in the gasoline example. Here, at an above-equilibrium price, there would be an excess supply or surplus, like the quantity demanded of gasoline falling and the quantity supplied rising at a higher price. The ultimate goal in such scenarios is to determine the equilibrium price and quantity, where the quantity supplied equals the quantity demanded, as shown in salmon market example.