Final answer:
The student's query is addressed by explaining the inverse relationship between price and demand and providing the resulting demand equation for candy as D(p) = 675/p. For the movie ticket scenario, the demand and supply curves must be graphed and adjusted to represent the new changes: a shift leftward for decreased demand due to new nightclubs and an increase in supply due to the elimination of a local tax.
Step-by-step explanation:
The law of demand demonstrates an inverse relationship between price and quantity demanded. When price increases, quantity demanded decreases, and vice versa, assuming all other factors are constant. In the given scenario, a demand equation for candy can be modeled as an inverse function, D(p) = k/p, where k is a constant that represents the product of price and quantity demanded at a given point. With the given data, where the price p is $3.00 per bag and demand D is 225 bags, we can find k by multiplying them together, resulting in k = 675. Thus, the demand equation becomes D(p) = 675/p.
To address the scenario of changes to movie ticket demand and supply, we would first graph the initial supply and demand curves to find the equilibrium. If nightclubs open, decreasing movie ticket demand by six units at all prices, we shift the demand curve leftward by six units. If a local entertainment tax is eliminated, increasing supply by 10% at each price, we would increase the quantity supplied by 10% at every price point of the supply curve. These changes need to be reflected in both graph and tabular form to understand their impact on the market equilibrium.