The Market Forces of Supply and Demand (Mobile-Enabled) Graded Assignment | Read

Question

The Market Forces of Supply and Demand (Mobile-Enabled) Graded Assignment | Read Chapter 4 | Back to Assignment Due Saturday 06.23.18 at 11:45 PM Attempts: Average: 12 12. Market equilibrium and disequilibriumm The following graph shows the monthly demand and supply curves in the market for keyboards Use the graph input tool to help you answer the following questions. Enter an amount into the Price field to see the quantity demanded and quantity supplied at that price. You will not be graded on any changes you make to this graph. Graph Input Tool Market for Keyboards 80 72 5 64 Price Dollars per keyboard) Sup 16 uantit emanded 310 Quantity Supplied 100 (Keyboards) (Keyboards) 248 40 O 32 ? 24 Session Demand

Explanation / Answer

The equilibrium price is $ 40 per keyboard and quantity is 300 keyboards. This is the intersection of supply and demand curves.

Surplus when the quantity supplied exceeds the quantity demanded.

Shortage when the quantity demanded exceeds the quantity supplied.

Price Shortage or surplus Shortage or surplus Pressure on prices Dollars per keyboard Keyboards 32 Shortage 75 Upward pressure 48 Surplus 75 Downward When price is $32 per keyboard, quantity supplied is 250 keyboards, quantity demanded is 325, shortage is 325-250=75 keyboards When there is a shortage, the pressure on prices will be upward. The suppliers can increase the prices to meet the excess demand. When price is $48 per keyboard, quantity supplied is 350 keyboards, quantity demanded is 275, surplus is 350-275=75 keyboards When there is a surplus, the pressue on prices will be downward as suppliers will cut prices to sell their goods.

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