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The following graph shows the monthly demand and supply curves in the market for calendars
The following graph shows the monthly demand and supply curves in the market for calendars. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Market for Calendars 60 54 24 48 Supply Price (Dollars per Calendar) Quantity Demanded (Calendars) 600 Quantity Supplied (Calendars) 250 PRICE (Dollars per calendar) 18 Demand 12 1 6 0 0 100 200 300 400 500 600 700 800 900 1000 QUANTITY (Calendars)
The equilibrium price in this market is $40 per calendar, and the equilibrium quantity is 225 calendars bought and sold per month. Complete the following table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and whether this places upward or downward pressure on prices. Price (Dollars per calendar) Shortage or Surplus Amount (Calendars) Pressure Shortage or Surplus Surplus 42 Upward 18 Shortage Downward
Expert Solution
Answer to blank 1: $30
Answer to blank 2: 500
Explanation:
Equilibrium occurs at the point where demand curve intersects the supply curve. Fron the graph, it is seen that the equilibrium price is $30 and equilibrium quantity id 500 calendars.
At price of $42, quantity supplied is 1000 and quantity demanded is 300. So. there is a surplus of 700 calendars (i.e., 1000 - 300). So, there will be downward pressure on price.
At price of $18, quantity supplied is 0 and quantity demanded is 700. So. there is a shortage of 700 calendars (i.e., 700 - 0). So, there will be upward pressure on price.
| Price ($) | Shortage or Surplus | Shortage or Surplus amount | Pressure |
| 42 | Surplus | 700 | Downward |
| 18 | Shortage | 700 | Upward |
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