The table attached shows the quantity demanded and quantity supplied of DVDs at

Question

The table attached 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 equilibrium quantity?
b. If the price of running shoes is $16, will there be a surplus or a shortage? how large is it? Explain how the market can adjust? c. Now suppose the price is $8. 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 prices. Draw the new demand curve on the same graph. What are the new equilibrium quantity and equilibrium price of DVDs?
The table below shows the quantity demanded and quantity supplied of DVDs at each price level. Price (dollars) Quantity Demanded Quantity Supplied 20 18 16 14 12 10 10 500 25 250 140 140 a- Draw a figure showing the demand curve and the supply for DVDs. What is the market equilibrium price and the market equilibrium quantity? b. If the price of running shoes is S16, will there be a surplus or a shortage? how large s it? Explain how the market can adjust? c. Now suppose the price is S8. Do we have a shortage or a surplus? How large is it? How the price of DVDs adjusts?

Explanation / Answer

a)Here DD is the demand curve and SS is the supply curve. Here DD and SS curve intersects at price=$12 and market equilibrium quantity is Q=140.

b) If the price of running shoes is P=$16.There will be a surplus of 205.The market can adjust by decreasing its price to P=$12.Where both the quantity demanded and quantity supplied is 140.

C) Now suppose that the price is $8.There will be excess demand by 260.Here the price adjusts as price increases to P=$12 where both the quantity demanded and quantity supplied is 140.

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