Question

question 5 (10 points)
a major grocery store chain switches from bagging groceries in paper sacks to bagging them in plastic bags. the grocery chain demands more plastic bags than are available at the current market price. what will happen as a result?
there is an excess demand for paper sacks at the current market price.
the market price for plastic bags is likely to increase.
there is an excess demand for groceries at the current market price.
the market price for paper sacks is likely to increase.

Explanation:

When demand for a good (plastic bags) exceeds its supply at the current market price, this creates excess demand. In a market system, excess demand typically puts upward pressure on the price of the good, as buyers compete for the limited supply, pushing the price higher until equilibrium is reached. The other options are incorrect: demand for paper sacks will decrease (not have excess demand), the grocery chain's switch does not affect grocery demand, and paper sack prices would likely fall, not rise.

Answer:

The market price for plastic bags is likely to increase.