Question

The table contains demand and supply data for eye glasses in a local market.

Price	Demand	Supply
$300	7,400	8,320
$290	7,480	8,200
$280	7,520	8,080
$270	7,600	7,960
$260	7,640	7,840
$250	7,720	7,720
$240	7,760	7,600
$230	7,840	7,480
$220	7,880	7,360

a. at $280, how many pairs will consumer want to buy?

b. how many pairs will consumers want to buy if the price is $290?

c. how many pairs will stores want to sell at $290?

d. is $290 the equilibrium price?

e. is there excess supply or excess demand at $290?

f. what is the equilibrium price? how can you tell?

Answer 1

a.

As it can be seen in the table that at price $280 the consumer is willing to buy 7,520 pairs.

b.

At price $290 the consumer is willing to buy 7,480 pairs.

c.

The stores want to sell 8,200 pairs at price $290.

d.

No, $290 is not the equilibrium because the quantity demand and supply are not equal at this price.

e.

There is excess supply at price $290 because supply is 8200 and demand is 7480 pairs.

f.

The equilibrium price is $250 because at this price both quantity demand and supply are equal and it is 7,720 pairs.