12. Market equilibrium and disequilibrium The following graph shows the monthly
ID: 1136388 • Letter: 1
Question
12. Market equilibrium and disequilibrium The following graph shows the monthly demand and supply curves in the market for hats Use the graph input tool to help you answer the following questions. Enter an amount into the Price field to see the quantity demanded and quantity supplied at that price. You will not be graded on any changes you make to this graph Graph Input Tool Market for Hats 100 90 80 70 60 50 40 Price (Dollars per hat) Quantity 30 Supply 500 Quantity Demanded (Hats) Supplied (Hats) Demand 20 10 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hats) per hat, and the equilibrium quantity is hats bought and sold per month The equilibrium price in this market is $Explanation / Answer
a) The equilibrium price in the market is $50 per hat, and the equilibrium quantity is 250.
b) When the price is 60, demand is 125 and the supply is 375. There is a surplus in the market of 250. It will face a downward pressure.
c) when the price is 40, demand is 375 and the supply is 125. There is a shortage in the market of 250. It will face a upward pressure.
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