The table below shows the quantity demanded and quantity supplied of DVDs at eac

Question

The table below shows the quantity demanded and quantity supplied of DVDs at each price level a Draw a figure showing the demand curve and the supply for DVDs. What is the market equilibrium price and the market equalibrium quantity? b. If the price of running shoes is $16, will there be a surplus or a shortage how large is Explain how the market can adjast c. Now suppose the price is " Do we have a shortage or a surplus? How large is it? How the price of DVDs adjusts? d. Suppose that the price of the DVDs decrease, resulting in the demand for DVDs increasing by 120 units at all peices Draw the new demand curve on the same graph. What are the new equilibrium quantity and equilibrium price of DVDs?

Explanation / Answer

P Qd Qs Qs2 20 10 500 130 18 25 400 145 16 45 250 165 14 80 250 200 12 140 140 260 10 200 80 320 8 300 40 420 6 450 5 570 a) The equilibrium is at Q = 140 and P = 12 b) At P = $16 the qd

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