Question

16. Consider the following table. Suppose quantity supplied increases by 30 for every price level. Find the new equilibrium price.

9:32 Th 6 19 thg 1 @ 88% Times New Roma 14 BIVA. I Price 16. Consider the following table. Suppose quantity supplied increases by 30 for every price level. Find the new equilibrium price. Quantity Quantity Demanded Supplied $10.00 10 100 $8.00 20 $6.00 $4.00 $2.00 $0.00 30 40 50 60 80 60 40 20 0

Answer 1

Equilibrium is attained at point where the quantity demanded is equal to the quantity supplied. Originally, the equilibrium quantity was 40 and equilibrium price was $4.00. Now, it is given that the quantity supplied increases by 30 for every price level. Under this situation there is no equilibrium price, because for all the positive range of the price, there is no point where the quantity demanded is equal to quantity supplied.

Price ($)	Quantity Demanded	Original Quantity Supplied	New Quantity Supplied
10.00	10	100	130
8.00	20	80	110
6.00	30	60	90
4.00	40	40	70
2.00	50	20	50
0.00	60	0	30