Question

Answer 1

An economic institution that facilitates interaction between buyers and sellers is called a market

A market exists when people exchange money for goods and services.

A market will always tend towards equilibrium

Market Equilibrium is determined when the quantity demanded of a commodity becomes equal to the quantity supplied.

Now In the below table,

Price per Movie	Quantity of movies demanded	Quantity of movies supplied
$15	40	80
$12	50	70
$10	60	60
$7	70	50
$5	80	40

So Equilibrium price will be where the quantity demanded and quantity supplied are equal and from the above table at price $10 quantity demanded and quantity supplied both are equal which is 60 movies, this is known as Equilibrium level.

At a price of $12 per movie,

A surplus of 20 movies occurs because demand in the market is for 50 movies and supply is for 70 movies so clearly, there are 20 movies extra which is not demanded in the market.

Let's understand a clear picture of this table

Price per Movie	Quantity of movies demanded	Quantity of movies supplied	Shortage(-) Or Surplus(+)	Remarks
$15	40	80	(+)40	Excess Supply
$12	50	70	(+)20	Excess Supply
$10	60	60	0	Equilibrium level
$7	70	50	(-)20	Excess Demand
$5	80	40	(-)40	Excess Demand