Question

3. Assume that the price of the price of ticket offices at the Christmas concert of the Venue Metro was determined by market forces. In actuality, the itineraries of Demand are the following: Price Quantity Demanded Quantity of Offer

$ 2 1,000 tickets 800 tickets

4 800 800

6 600 800

8 400 800

10 200 800

a. Draw the demand and supply curves. What is unusual about this supply curve? What reason could there be for this? (4 points)

b. What are the price and amount of equilibrium of the lockers? (4 points)

c. The Campus will reduce its enrollment next year by 200 students. The reduction in students will cause the next reduction in the itinerary of demand:

Price Reduction in quantity

$2 200 tickets

4 150

6 100

8 50

10 0

Reduce the original demand itinerary with the new information. Which Will the new price and the new balance amount be? (4 points)

Answer 1

(a) Demand and supply graph is as follows. The supply curve is vertical, which means quantity is fixed. It can be caused by a fixed capacity of concert hall.

(b) In equilibrium, quantity demanded = quantity supplied, which holds true when

Quantity demanded = quantity supplied = 800

Equilibrium price = $4

(c) New demand schedule is as follows.

Price	Initial Quantity Demanded	New Quantity Demanded	QS
0	0		0
2	1,000	800	800
4	800	650	800
6	600	500	800
8	400	350	800
10	200	200	800

In equilibrium, Quantity demanded = quantity supplied.

Quantity demanded = quantity supplied = 800

Equilibrium price = $2