Answer to Question #136430 in Macroeconomics for Gillian

Question

5. Suppose that the price of basketball tickets at Maryhill College is determined by market forces. Currently, the demand and supply schedules are as follows: Price (Php) Quantity Demanded Quantity Supplied 4 10,000 tickets 8,000 tickets 8 8,000 8,000 12 6,000 8,000 16 4,000 8,000 20 2,000 8,000 a. Draw the demand and supply curves and post it below. What is unusual about the supply curve? Why might this be true? b. What are the equilibrium price and quantity of tickets? Explain.

Answer 1

a. The supply curve is a vertical The stadium has a fixed number of seats, that is why the supply curve is vertical.

b. The equilibrium price is $8 and the equilibrium quantity is 8,000 tickets.(As seen in the graph)