Original quanity | new quantity . |price. |quanity supplied
demanded demanded
40 12$ 80
45 11$ 75
50 10$ 70
55 9$ 65
60 8$ 60
65 7$ 55
70 6$ 50
75 5$ 45
1. what is the equilibrium price and quanity? explain
2.what will occur if the price is instially set a $12
3.what will occur if the price is originally set at $5
4.draw a graph that illustrates the information for example
Now suppose that the demand increases by 10 units at each price. fill in the new quanity demanded in table above
5.determine the new equilibrium price and quanity
6.reproduce the graph tha u drew for question 4 and label oringinal demand and supply schedules and labal oringinal equilibium price and quanity. now draw new curves for new equilibrium aon same graph
take a shot, what do you think?
hint: drawing a graph will help, put Price on the y-axis, Q on the x-axis. and plot Qs and Qd. Equilibrium occurs when Qs=Qd for a given price.
1. To find the equilibrium price and quantity, we need to look for the point where the quantity demanded equals the quantity supplied. In this case, the equilibrium quantity is where the quantity demanded and supplied intersect, and the equilibrium price is the price at that intersection.
Looking at the table, we can see that at a price of $8, the quantity demanded and supplied both equal 60 units. Therefore, the equilibrium price is $8, and the equilibrium quantity is 60 units.
2. If the price is initially set at $12, it is higher than the equilibrium price of $8. This means that the quantity supplied will exceed the quantity demanded. As a result, there will be a surplus of goods in the market. In this case, the quantity supplied is 80 units, while the quantity demanded is only 40 units. The market will need to adjust by lowering the price in order to clear the surplus.
3. If the price is originally set at $5, it is lower than the equilibrium price of $8. This means that the quantity demanded will exceed the quantity supplied. As a result, there will be a shortage of goods in the market. In this case, the quantity supplied is 45 units, while the quantity demanded is 75 units. The market will need to adjust by raising the price in order to clear the shortage.
4. Here's an example graph to illustrate the information:
Price
12 | /
11 | /
10 | /
9 | /
8 | /
7 | /
6 |/
--------------------------
Quantity
The demand curve would slope downwards and the supply curve would slope upwards. The point where they intersect is the equilibrium price and quantity.
5. If the demand increases by 10 units at each price, we can simply add 10 to the quantity demanded in the table. For example, the new quantity demanded at a price of $12 would be 90 units, and at a price of $5, it would be 55 units.
6. To reproduce the graph, we need to plot the new demand and supply curves along with the original equilibrium price and quantity. The new curves would shift upwards (to the right) because of the increase in demand. The new equilibrium price and quantity can be found by identifying the new intersection point of the demand and supply curves.