Question

Question 3 [20] 3.1. List one (1) factor that can cause a change in the quantity supplied and three (3) factors that can cause a change in supply. 3.2. Using two basic supply curve graphs, illustrate the difference between a change in the quantity supplied and a change in supply. Tip: Show what happens to price and quantity in each case, 3.3. By referring to price and quantity, describe in detail what the situation of equilibrium reflects on a supply and demand diagram. 3.4. Assume that the market for Nike T-shirts can be represented as follows: Demand equation: QD = 100 000 - 1 000 Supply equation: Qs = 20 000 + 2 000P (quantity supplied can, of course, never be negative) Calculate the equilibrium price and quantity from the given equations. (Hint: At equilibrium QDQs. Use this to calculate the equilibrium price (P) and then substitute the value of P into either one of the equations to obtain the equilibrium quantity {Q}.)

Answer 1

Answers -- (3-1)- change in price of the good causes the change in quantity Supplied. - the factors that cause supply to change- (1) income of consumess (ii) price of other goods (ii) change in the faste of consumers. 9 OP2 change in quantity supplied (movement along the curve) change in supply (shift in the curve). (3.3). Equilibrium in supply and graphe demand & Supply A equilibrium (supply = demand) p* Demand sno GY

(3.4) Po = lov,cvo - scoop Qs = 20000t a coop of equilibrium (COD=05) orol a lao, ero - loop = 20000 t 80,00 = 3ovo p ©* = 73,3 33- 33