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QUESTION:

10. Market equilibrium

The following table presents the monthly demand and supply in the market for boots in San Francisco.
PriceQuantity DemandedQuantity Supplied
(Dollars per pair of boots)(Pairs of boots)(Pairs of boots)
201,100200
40900400
60800500
80600900
1005001,200
On the following graph, plot the demand for boots using the blue point (circle symbol). Next, plot the supply of boots using the orange point (square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for boots.
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.

ANSWER:

The following table presents the monthly demand and supply in the market for boots in San Francisco.
PriceQuantity DemandedQuantity Supplied
(Dollars per pair of boots)(Pairs of boots)(Pairs of boots)
201,100200
40900400
60800500
80600900
1005001,200
On the following graph, plot the demand for boots using the blue point (circle symbol). Next, plot the supply of boots using the orange point (square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for boots.
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.
Points:
1 / 1
Close Explanation
Explanation:
Each point on the market demand curve for boots corresponds to an entry in the demand schedule. For example, at a price of $40 per pair, the quantity of boots demanded is 900 pairs per month. Therefore, the point (900, 40) lies on the market demand curve for boots. Similarly, each point on the market supply curve corresponds to an entry from the market supply column. For example, at a price of $80 per pair, the quantity of boots supplied is 900 pairs per month. Therefore, the point (900, 80) lies on the market supply curve. To generate market demand and supply curves, plot a point for each entry in the demand column and each entry in the supply column.
The market equilibrium occurs at the price at which the quantity demanded equals the quantity supplied. In this case, the demand and supply curves intersect at a price of $70 per pair of boots and a quantity of 700 pairs per month. Therefore, the point (700, 70) represents the equilibrium in this market.

Posted by Cleveland on August 30, 2024
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