Question

1. Presented below are demand and supply schedules for bread in East Yeastville, Colorado.                             &

1. Presented below are demand and supply schedules for bread in East Yeastville, Colorado.  

                                                               

           |   price | quantity demanded | quantity supplied |

           | ($/loaf) | (loaves / week)   | (loaves / week) |

           |   5.00   |       1000        |       6000        |

           |   4.50   |       1300        |       4500        |

           |   4.00   |       1600        |       4000        |

           |   3.50   |       2000        |       3500        |

           |   3.00   |       3000        |       3000        |

           |   2.50   |       3200        |       2700        |

           |   2.00   |       4000        |       2200        |

           |   1.50   |       4500        |       1800        |

           |   1.00   |       5400        |       1400        |

           |    .50   |       7000        |       1200        |

a. Is the Law of Demand satisfied? Yes / no . How do you know?

b. What is the equilibrium price? _______ And the equilibrium quantity? ________

c. At a price of $4.00, is there a shortage or surplus? __________. How big is it? ______

d. At a price of $1.00, how much would be bought and sold? _________

e. Suppose that supply increases by 1800 units at each price. At the original equilibrium price is there

a shortage or a surplus? When the market adjusts to its new equilibrium, what

will the new price be? And the new equilibrium quantity?

Homework Answers

Answer #1

a) yes

Law of demand says that demand and price are inversely related, other things constant.

Quantity demanded is increasing with decrease in price.

b) equilibrium is reached when quantity demanded is equal to quantity supplied. Equilibrium quantity is 3000 and equilibrium price is 3.

c) there is surplus because supply 4000 is greater than demand 1600 by. 4000-1600= 2400.

d) At price 1 demand is greater than supply, so all the quantity supplied will be bought and sold, i.e.1400

e) there is a surplus as supply is now greater than demand.

Price adjusts and new equilibrium is reached when quantity demanded is 4000 and new quantity supplied is 2200+1800= 4000 at equilibrium price is 2.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The market for bread has the following demand and supply schedules: Price                      Quantity Demanded Loaves Quantity...
The market for bread has the following demand and supply schedules: Price                      Quantity Demanded Loaves Quantity Supplied Loaves $1.50                             224 59 $2.00                             175 114     $2.50                             145                                                       128                                                               $3.00                             136                                                       136                                                                    $3.50                             110                                                       164                                          $4.00 65                                                        215 (a) Graph the demand and supply curves. What is the equilibrium price and quantity in this market for bread? (b) If the actual price were above the equilibrium price, what is taking place in the market?...
The market for bread has the following demand and supply schedules: Price                      Quantity Demanded Loaves Quantity...
The market for bread has the following demand and supply schedules: Price                      Quantity Demanded Loaves Quantity Supplied Loaves $1.50                             224 59 $2.00                             175 114     $2.50                             145                                                       128                                                               $3.00                             136                                                       136                                                                    $3.50                             110                                                       164                                          $4.00 65                                                        215 (a) Graph the demand and supply curves. What is the equilibrium price and quantity in this market for bread? (b) If the actual price were above the equilibrium price, what is taking place in the market?...
Assume the following information for the demand and supply schedules for coffee. Price Quantity demanded (thousands...
Assume the following information for the demand and supply schedules for coffee. Price Quantity demanded (thousands of kg) Quantity supplied (thousands of kg) 6 3 9 5 4 7 4 5 5 3 6 3 2 7 1 (a) Graph the corresponding demand and supply curves and identify the equilibrium price and quantity of coffee? (b) What do you mean by shortage and surplus? (c) At the price of $6, would there be a shortage or a surplus and how...
Assume the following information for the demand and supply schedules for coffee. Price Quantity demanded (thousands...
Assume the following information for the demand and supply schedules for coffee. Price Quantity demanded (thousands of kg) Quantity supplied (thousands of kg) 6 3 9 5 4 7 4 5 5 3 6 3 2 7 1 (a) Graph the corresponding demand and supply curves and identify the equilibrium price and quantity of coffee? (2) (b) What do you mean by shortage and surplus? (2) (c) At the price of $6, would there be a shortage or a surplus...
ECON - 102 - Microeconomics   graph the supply curve. Price Quantity Demanded $1200 1000   1000 2200...
ECON - 102 - Microeconomics   graph the supply curve. Price Quantity Demanded $1200 1000   1000 2200   800 3000   600 4000   400 5000   200 10000 Price Quantity Supplied $1200 24000 1000 21000    800 8000   600 4000    200 1000    100 0 a. Draw the original Supply and Demand of solar panels on the same graph.  What is the equilibrium price and the equilibrium quantity? b. What would be the specific result if the government put a price floor on solar panels at $1000?  Be...
The market for pizza has the following demand and supply schedules: Price Quantity demand Quantity supplied...
The market for pizza has the following demand and supply schedules: Price Quantity demand Quantity supplied 4$ 100 25 5$ 75 50 6$ 60 60 7$ 40 90 8$ 25 100 a. Graph the demand and supply curves? b. What is equilibrium price and quantity? c. If the actual price in the market is 5$, would this create a surplus or shortage? What is the amount of this surplus or shortage? What shall sellers do in this case? d. If...
Consider the supply and demand schedules for calzones at a local pizzeria. Use the information in...
Consider the supply and demand schedules for calzones at a local pizzeria. Use the information in the schedules to answer the five questions. Demand Price (P) $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 Quantity (Q) 20 40 60 80 100 120 140 160 180 200 Supply Price (P) $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 Quantity (Q) 20 30 40 50 60 70 80 90 100 110 Consider the supply and demand schedules for...
A market is described by the following supply and demand curves: QS = 2P QD =...
A market is described by the following supply and demand curves: QS = 2P QD = 400 - 3P Solve for the equilibrium price and quantity. If the government imposes a price ceiling of $70, does a shortage or surplus (or neither) develop? What are the price, quantity supplied, quantity demanded, and size of the shortage or surplus? If the government imposes a price floor of $70, does a shortage or surplus (or neither) develop? What are the price, quantity...
1. Consider the individual supply and demand schedules below: a. In the below chart, sum the...
1. Consider the individual supply and demand schedules below: a. In the below chart, sum the market supply and demand for cookies: Price Cerise Amonette Rose Market Demand Tollhouse Girl Scouts Market Supply $0 8 5 4 0 0 $1 6 4 3 2 1 $2 4 3 2 4 5 $3 2 2 1 7 6 $4 1 1 0 8 10 b. Use the above Market Demand and Supply Schedule to draw the supply and demand curves. Indicate...
A market is described by the following supply and demand curves: QSQS =  = 3P3P QDQD =  =...
A market is described by the following supply and demand curves: QSQS =  = 3P3P QDQD =  = 400−P400−P The equilibrium price is______ and the equilibrium quantity is_______ . Suppose the government imposes a price ceiling of $80. This price ceiling is (binding or not binding) , and the market price will be . The quantity supplied will be______ , and the quantity demanded will be_____ . Therefore, a price ceiling of $80 will result in (a shortage, neither a shortage nor...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT