Table 3.8 shows information on the demand and supply for...

Table 3.8 shows information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands. a. What is the quantity demanded and the quantity supplied at a price of $\$ 210 ?$ b. At what price is the quantity supplied equal to $48,000 ?$ c. Graph the demand and supply curve for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from the table? What are the equilibrium price and equilibrium quantity? d. If the price was $\$ 120,$ what would the quantities demanded and supplied be? Would a shortage or surplus exist? If so, how large would the shortage or surplus be?

Table 3.8 shows information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands.
a. What is the quantity demanded and the quantity supplied at a price of $\$ 210 ?$
b. At what price is the quantity supplied equal to $48,000 ?$
c. Graph the demand and supply curve for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from the table? What are the equilibrium price and equilibrium quantity?
d. If the price was $\$ 120,$ what would the quantities demanded and supplied be? Would a shortage
or surplus exist? If so, how large would the shortage or surplus be?

Key Concepts

Shortage and Surplus

A shortage occurs when the quantity demanded exceeds the quantity supplied at a given price, leading to upward pressure on prices. Conversely, a surplus arises when the quantity supplied is greater than the quantity demanded at a given price, prompting downward pressure on prices until the market reaches equilibrium.

Graphical Analysis of Supply and Demand

Graphing the demand and supply curves provides a visual method to analyze market behavior. The intersection point of these curves identifies the equilibrium price and quantity. Additionally, the graph can clearly illustrate situations of shortage (when the demand curve is above the supply curve at a particular price) and surplus (when the supply curve is above the demand curve), providing insights into market imbalances.

Equilibrium Quantity

This is the quantity of the good that is bought and sold at the equilibrium price. It reflects the point at which the supply and demand curves intersect, representing a stable market condition where the interests of both buyers and sellers are balanced.

Demand

This concept refers to the relationship between the price of a good and the quantity consumers are willing to purchase at each price level. It is typically represented by a demand schedule or curve that shows how quantity demanded varies as the price changes, reflecting consumer preferences and purchasing behavior.

Supply

Supply describes the relationship between the price of a good and the quantity producers are willing to offer for sale. The supply schedule or curve shows how quantity supplied changes with price, indicating how producers react to price signals in terms of production levels.

Equilibrium Price

The equilibrium price is the market price at which the quantity demanded by consumers equals the quantity supplied by producers. It represents the state of balance in the market where there is neither a surplus nor a shortage of the good.

Transcript

00:04 All right, we are going to be looking at the question that is given where information is provided regarding bicycles, and we're going to be looking at demand and supply of these bicycles.

00:19 The given information is in the table, and the first thing we ought to always look at when we are plotting demand and supply curves is that the price should always.

00:34 Always be on the vertical axis and the quantity on the horizontal axis.

00:40 Now the other thing that we need to quickly note is the units that are given or that are represented by the information in the table.

00:49 So we note that the number of bicycles is actually in thousands.

00:54 All right.

00:55 So the first part of the information that is given, all right, is the price at 120.

01:04 The price at 150 the price at 180 price at 210 and two hundred and forty dollars okay so those are the figures that we're gonna be working with so to do that we're gonna be doing that very quickly because you're supposed to prove to plot it on the graph so it's gonna be important that we do so at 120 where is my 120? you'll notice around the board approximately on my diagram here, the 120 will be somewhere here.

01:42 120 will be somewhere here.

01:44 Let me just put different ink, all right, just to indicate 120.

01:51 All right, if my 120 is somewhere there.

01:54 At price 120, the information that is given is that quantity demanded is 50, quantity supplied is 36.

02:02 So if i can use different shades or i can for quantity demanded, if i can put blue, so it is 50 at 120.

02:13 So if you're really going to plot this, okay, that is your quantity demanded.

02:24 And your quantity supplied is 36.

02:27 If i can use red for quantity supplied, 36 will be somewhere here.

02:34 Okay.

02:36 So you're going to have to do this.

02:38 For the rest of the price levels that are given 150 dollars we have 40 and 40 40 thousand units demanded and 40 thousand units supplied that is at 150 dollars so 150's right here so if i'm to start with my demand which is going to obviously pay the same as the supply so 40 if you can see here the way this is the 40 mark if you come up here you're going to plot i'll use blue but you notice that it is also where the supply and demand are the same.

03:31 All right so we'll do this quickly 180.

03:36 So my 180 is if the this is 150 this is 200 my 180 somewhere here the quantity demanded is 32 quantity supplied is 48 so 32 and 48 32 will be probed somewhere here all right that's demand and quantity supplied which is red is actually 48 where is my 48 somewhere here just just before all right i can plot it right okay so this is how you would need to do in order for information to be accurate using your crafts 22 10 dollars we have 28 quantity demanded and 56 quantity supplied okay so 28 quantity demanded and price to 10 and quantity supplied is given as 5 to 6 all right i'm not going to be the most accurate using free hand here but as long as the concept is received well that is the most important thing 240 is the the quantity is the price and at that price 24 ,000 units are demanded 70 ,000 are supplied so 24 ,000 it would be somewhere around yeah those are the units and 240 would be someone yes close to 250 obviously so i plot my demand point there and quantity supplied is 70 ,000 which is right here and you're going to plot your information now once you get your items right you can just just join the points...

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