Suppose the following graph shows the supply of and demand for admission to New

Question

Suppose the following graph shows the supply of and demand for admission to New York University, where supply represents the number of student openings and demand represents the number of students who want to attend NYU (i.e., the number of student applications) at any given level of tuition. Use the graph to help you answer the questions that follow. You will not be graded on any adjustments made to the graph Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just try again and drag it a little farther. Admission to New York University 72 60 Demand 48 Supply 36 12 12 16

Explanation / Answer

Equilibrium price and quantity are derived at the intersection of the demand and supply curves.

Thus, equilibrium level of tution fees is 36000 and the number of students applications is 12000

When the tuition fees is set at 24000,the quantity demanded is 16000 and quantity supplied is 12000.Since,demand>supply, applications will EXCEED the number of job openings.

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