Question

The diagram to the right is a basic supply and demand graph. Economists use it to analyze equilibrium price and quantity in a market When price equals $4, a shortage occurs. 1.) Using the line drawing fool, draw a horizontal line from the S4 value on the vertical axis to represent the shortage Label this line Price 2.) Using the point drawing fool, locate quantity demanded (label the point P.) and quantity supplied (label the point Py) at this price of $4. 8 8 8 Carefully follow the instructions above and only draw the required objects. 8 The amount of the shortage is units. 8 This shortage will cause price to to equilibrium level 2.004 1.001 0.001162636 20 50 60 70 Quantity per unit of time 900

Answer 1

Price per unit) 2.00 1.00-1 0.00 016 3 0 40 50 60 70 Quantity per unit of time 80 100

Shortage = P2-P1

= 60-40

= 20

shortage will cause price to increase