Kindly Answer 6 , 7 and 8 in details Please Let the initial price of a good be $
ID: 1225389 • Letter: K
Question
Kindly Answer 6 , 7 and 8 in details Please
Let the initial price of a good be $ 5. If buyers wish to purchase 4000 units per week at that price while sellers wish to sell 5000 units per week, then price will tend to increase in the future firm output will tend to increase in the future price and output will ten to remain the same for the future The following table contains data pertaining to the market for mountain bikes. Use this data to answer questions 8 & 9 The equilibrium price in the market is: 100 200 300 400 The equilibrium quantity exchanged in the market is: 2000 bikes 3000 bikes 4000 bikes 5000 bikes If IBM and Compaq computers are substitutes, a decrease in the price of IBM PC's will cause: a decrease in the demand for Compaq computers an increase in the demand for IBM computers an increase in the supply of IBM computers an increase in the supply of Compaq computers price will tend to decrease in the futureExplanation / Answer
6. Option C is correct.
The equilibrium in a market is established when the demand equals the supply and this occurs at price = $300 when the demand = supply = 3000 units.
7. Option B is correct.
The equilibrium point represents the situation where the number of units demanded by buyers is equal to the same number of units supplied by the sellers, so that there is neither an excess demand or supply.
8. Option A is correct.
A decrease in the price of IBM PC's implies that more IBM PC's would be demanded now, and less of compaq, because relatively compaq has now become expensive. So a decrease in the price of substitute goods would decrease the quantity demanded of the other good.
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