Question

Refer to the graphic below. Price $60 40 20 Supply Demand 0 50 100 150 200 Quantity At a price of $50 Select one: a. The market is not at equilibrium and the quantity demanded is equal to the quantity supplied b. The surplus is lower than 100 c. The market is at equilibrium and the quantity demanded is equal to the quantity supplied d. The shortage is lower than 100

          Refer to the graphic below.
Price
$60
40
20
Supply
Demand
0
50
100
150
200
Quantity
At a price of $50
Select one:
a. The market is not at equilibrium and the
quantity demanded is equal to the quantity
supplied
b. The surplus is lower than 100
c. The market is at equilibrium and the quantity
demanded is equal to the quantity supplied
d. The shortage is lower than 100

Show more…

Refer to the graphic below.
Price
60
40
20
Supply
Demand
0
50
100
150
200
Quantity
At a price of50
Select one:
a. The market is not at equilibrium and the
quantity demanded is equal to the quantity
supplied
b. The surplus is lower than 100
c. The market is at equilibrium and the quantity
demanded is equal to the quantity supplied
d. The shortage is lower than 100

Added by Brian G.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Crystal Wang

09/03/2023

Step 1

From the demand table, we can see that at a price of $50, the quantity demanded is 100. From the supply table, we can see that at a price of $50, the quantity supplied is 0. Show more…

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Supply $60 Price 40 20 Demand 0 50 100 150 200 Quantity At a price of $50 Select one: a. The market is not at equilibrium and the quantity demanded is equal to the quantity supplied b. The surplus is lower than 100 c. The market is at equilibrium and the quantity demanded is equal to the quantity supplied d. The shortage is lower than 100

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Transcript

00:02 We want to find the equilibrium quantity and price.

00:06 So we're given demand and supply.

00:07 So at equilibrium, the equilibrium price and quantity are the same.

00:13 So therefore, we're going to set these two equal.

00:17 So we have quantity demanded is 60 minus p.

00:23 And we have quantity supplied is p minus 20.

00:26 So we're going to set these two expressions equal.

00:29 And now we can solve for p.

00:49 So equilibrium price is 40.

00:51 Now we need to get equilibrium quantity.

00:54 Now we can plug the equilibrium price into either of these formulas to get it.

01:06 So you can use either supply or demand.

01:09 So we end up getting that equilibrium quantity is 20.

01:26 So now we have a price floor.

01:35 So with the price floor, that's the maximum price.

01:39 So it's going to be above the equilibrium price.

01:44 So we want to calculate the surplus.

01:50 Quantity supplied is greater than quantity demanded.

01:52 So we take our supply.

01:57 And we're just going to substitute in the price that's given.

02:10 So that's 50 minus 20...

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