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Homework answers / question archive / In the table below put in the quantity demanded at each price from question 1 and put in the quantity supplied at each price from question 2
In the table below put in the quantity demanded at each price from question 1 and put in the quantity supplied at each price from question 2.
|
P |
QD |
QS |
|
0 |
50 |
0 |
|
10 |
40 |
40 |
|
20 |
30 |
80 |
|
30 |
20 |
120 |
|
40 |
10 |
160 |
|
50 |
0 |
200 |
a) Explain why P=40 is NOT an equilibrium price. What will happen to the market price if it is initially equal to $40? WHY?
b) What is the equilibrium price? What is the equilibrium quantity? Explain WHY this is the equilibrium price and quantity.
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