12. Market equilibrium and disequilibrium The following graph shows the monthly
ID: 1148396 • Letter: 1
Question
12. Market equilibrium and disequilibrium The following graph shows the monthly demand and supply curves in the market for teapots 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 Teapots 72 Price (Dollars per teapot) Su 24 64 Quantit Demanded (Teapots) Quantity Supplied (Teapots) 500 150 56 48 40 Demand 32 24 16 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Teapots)Explanation / Answer
1)
Market for tea pots
Price
24
Quantity demanded
500
Quantity Supplied
150
2) The equilibrium price in this market is $40 ; per teapot, and the equilibrium quantity is 250
Explanation: The market equilibrium occurs at the price at which the quantity supplied equal quantity demanded.
3) At a price of $46 per teapot, consumers demand 110 teapots per month, but producers supply 300 teapots per month. Therefore, supply exceeds demand by 290 teapots per month.
At a price of $32 per teapot, consumers demand 370 teapots per month, but producers are willing to supply 210 teapots per month. Therefore, demand exceeds supply by 160 teapots per month.
Price
Shortage or Surplus
Shortage or Surplus Amount
Pressure
46
Ssurplus
290
Downward
32
Shortage
160
Upward
Market for tea pots
Price
24
Quantity demanded
500
Quantity Supplied
150
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