Original quanity | new quantity . |price. |quanity supplied demanded demanded 40
ID: 1244839 • Letter: O
Question
Original quanity | new quantity . |price. |quanity supplieddemanded demanded
40 12$ 80
45 11$ 75
50 10$ 70
55 9$ 65
60 8$ 60
65 7$ 55
70 6$ 50
75 5$ 45
1. what is the equilibrium price and quanity? explain
2.what will occur if the price is instially set a $12
3.what will occur if the price is originally set at $5
4.draw a graph that illustrates the information for example
Now suppose that the demand increases by 10 units at each price.fill in the new quanity demanded in table above
5.determine the new equilibrium price and quanity
6.reproduce the graph tha u drew for question 4 and label oringinaldemand and supply schedules and labal oringinal equilibium priceand quanity. now draw new curves for new equilibrium aon same graph
Explanation / Answer
1. The equalibrium price is the price where you have equal amountsof supply and demand in terms of quanity. 2. If the price is initially 12 dollars, the price will fall due toa surplus of goods, eventually reaching equalibrium price of 8dollars in theory, although probably not in the real world. 3. If the price is originally set at five dollars, there will be ashortage of product, causing for an increase in price over the longrun, making its way back to equalibrium. 4. I think you can do this yourself. Just like the graph inthe Wikipedia example. 5 +6: If demand increases by 10 then there will be a vertical shiftin the supply demand curve by ten. Edit: Wikipedia graph didn't match problem. Also shift will bevertical because supply is not changing. Hopefully you can figure it out from there. I think all theseanswers are correct.
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