12. Market equilibrium and disequilibrium The following graph shows the monthly
ID: 1140477 • Letter: 1
Question
12. Market equilibrium and disequilibrium The following graph shows the monthly demand snd supply curves in the market for calendars Use the graph input tool to help you answer the folawing questions. Enter an amount iwto the Price fNeld to see the quanbity demanded and quantity suppiied at that price. You wr not be graded on any changes you make to this graph Graph Input Tool Market for Calendars Price Dollars pd calendar) Querkity Demanded Cavendars 110 Cuasivtity Supplied 190 (Calendtas,) 50 100 360 00 252 300 350 400 0 00 QUANTITY Icard rs) The equilibrium price in this market is s per calendar, and the equtibrium quentity is calendars bought and sold per month.Explanation / Answer
Answer
We can see from above graph that Green line(Price = $20) intersect orange line (supply Curve) when Quantity = 190 and green line also intersect Blue line(Demand Curve) when 310. Hence at Price = $20 Quantity Demand = 310 and Quantity Supplied = 190. As quantity demand > quantity supplied , hence there is a shortage at Price = $20.
Equilibrium in this market will occur for that price at which Quantity Supplied = Quantity Demand i.e. Equilibrium will occur at that Price where Orange Line (Supply curve) and Blue Line (Demand Curve).
We can see from graph above that Demand and Supply when Price = $50. Hence equilibrium Price = $50 and equilibrium quantity = Quantity supplied = quantity demand = 250
The equilibrium Price is $50 Per calender and equilibrium quantity is 250 calenders sold and bought per month.
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