Question

Hp Acrobat Tell me what you want to do Аавьсере 1 Normal Аавьсере Аавьс Аавьсс Аав давьссс Аавьсере Аавьсере 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em.. Emphasis Styles PRICE PER UNIT OF X QUANTITY OF X DEMANDED PER TIME UNIT QUANTITY OF X SUPPLIED PER TIME UNIT 1,500 800 $10 1,000 A. Graph the above supply and demand schedule. Label all axes and curves. Indicate equilibrium price and quantity according to the above market data for good X. B. Explain what is meant by the term equilibrium C. At a price of $18.00 per unit, other things held constant, what exists in this market? Indicate this on your graph. D. At a price of $12.00 per unit, other things held constant, what exists in this market? Indicate this on your graph E. What will happen over time starting at a price of $18.00 or a price of $12.00 if the market is allowed to operate on its own? Explain carefully the process by which a market moves toward equilibrium accounting for the role of inventories in the market adjustment. 2. What will happen to the demand for personal computers if a. there is a rise in incomes b. if consumers expect a lower price for computers c. if software prices fall d. personal computers become simpler to operate e. if the price of personal computers fall Show graphically. 3. What will happen to the supply of personal computers if a. there is a rise in wage rates b. the is an increase in the number of sellers of computers c. a tax is placed on the production of computers d a subsidy is placed on the production of computers e if the price of personal computers rises Show graphically

Answer 1

1. Equilibrium occurs at the point where quantity demanded = quantity supplied. If Market price is greater than equilibrium price, this will cause a surplus and put downward pressure on prices. If Market price is less than equilibrium price, that will cause a shortage and put upward pressure on prices.

1. plotting the demand and supply curve > D Price per unit of x A 20 surplus & Supply ------ t t n shortage - Demand, N 200/4006003190.000,00 Bolo Guantity of a 0 99 200 500 300 2 Equihbrium occurs at the point where Demand and supply cumve intersects. At equilibrium, quantity demanded = quantity supplied. In this market, point E is the equilibrium point, Equilibrium price is $14 unit and equilibrium quantity is 600 units of of x per time, e) At a price of $18 unit, quantity supplied = 1200 units. and quantity demanded = 200 units. Therefore, there will be a surplus of (1200-200) = 1000 units. This is shown on the above graphi Dy At a price of $12/unit, quantity demanded exceeds quantity supplied. Therefore, there will be a shortage of good X.. This is shown on the above gesaph. El At a price of $18/unit, there will be a surplus. If the market is allowed to operate on it's own. then this sumpws amount will put a downward

pressure on posices. This will & quantity supplied and I quantity demanded and the market eventually will reach equilibrium. At a price of $12/unit, there will be a shortage. It the market operates on it's own, then this shortage will put an upward pressure on prices. This will t quantity demanded and ↑ quantity supplied, so that the market reaches equilibrium eventually,