Question

12. Market equilibrium and disequilibrium 

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. 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.

 The equilibrium price in this market is _______  per calendar, and the equilibrium quantity is _______  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. 

Answer 1

AT $42 price , the quantity supplied is 700 and quantity demanded is 420 , so there is a surplus, surplus amount = 700 - 420 = 280

AT $18 price , the quantity supplied is 300 and quantity demanded is 580 , so there is a shortage , shortage amount = 580 - 300 = 280

in order to find out the exact number you need to find the intersecting point at the respective prices , like at a price of $42 , quantity supplied will be 700 , as by drawing horizontal lines in the graph.