Question

Price Supply $1.60- 1.00 50 Demand 0 130 200 290 Quantity Refer to the diagram. The equilibrium price and quantity in this market will be

Answer 1

Price Supply Determine the Equilibrium Price and Output (Quantity) As per the rule the equilibrium price and output is determined at that point where the demand curve intersects the supply curve. It otherwise means that price is determined at that point where the quantity demanded just equals to the quantity supplied. In the diagram give, the downward sloping curve is the demand curve and the upward slopping curve is supply $1.60 curve. $1.00 Both the curve intersects at one point. That point is called as the equilibrium point. The corresponding price is called equilibrium price and output is called equilibrium output. In the diagram equilibrium price is $1 and the equilibrium output is 200. 0.50 Equilibrium Price =$1 Equilibrium Quantity = 200 Demand 290 130 200 Quantity