Answer-1

• when the price is $2 per kilogram, then the demand for apples is 25 k.g while the supply is 9 k.g and we can see that there is a shortage of 16 k.g because demand > supply and this represents shortage in the economy.
• When demand is greater than supply then the price would increase and demand would eventually decrease and by seeing the price increasing the suppliers would increase the supply and the market would attain the equilibrium.

Answer-2

• when the price is $10 per kilogram then the demand is only for 5 k.g while the supply is 21 k.g and therefore this represents a situation where supply > demand and therefore there is surplus units of apples in the economy.
• In this situation due to excess supply the competition among seller would increase to sell and they would lower the price and by seeing the price reduction the the consumer would increase there demand and economy would again restored to the equilibrium level.

Answer-3

when the buyers and sellers would agree to deal at a same price only then the equilibrium point would be attained.

In other words when the

Equilibrium =Quantity demanded = quantity supplied.

In the given problem, the equilibrium price is represented by a price of $6 when the quantity demanded is equal to quantity supplied.

Therefore,

• Equilibrium price=$6
• Equilibrium quantity=15 units

Answer-4

• when price of pears are reduced and are perfectly substitute to apples then the demand for apples would eventually reduce.The equilibrium point would get disturbed.
• The suppliers would get discouraged by the reduced demand and they would offer he apples at a lower price and at the end the price would be somewhere equal to the price of pears.
• If any equilibrium point is attained then it would be at a lower point then the earlier level.

Answer-5

• if the population of the economy increases then the demand for Apple would surely increase up to some extent and due to limited supply in the short run the price would increase and equilibrium point would be disturbed due to excess demand.
• By seeing the increases demand the seller would be encouraged and would supply more and more units of apples. In the long run the economy would attain the equilibrium but it would be somewhere above the earlier level of equilibrium due to inflation in the economy.

Answer-6

• when government introduced a price flooring of $8 then it means no seller can sell the apples below the price of $8 and therefore at this stage the supply > demand and therefore surplus units would be there.
• At this situation when the price is floored at $8 then the total demand would be 8 units and supply would be of 18 units and thus the surplus of unsold units is 8 units.

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