Answer to Question #155380 in Microeconomics for Abdullah irfan

Question

Question: Suppose you are working in a laptop selling company as general manager, due to Covid-19 situation, all the schools, colleges, Universities has shifted their classes online (zoom, Google classroom etc), due to this situation the Company owner discuss the following future situations regarding shifting of demand and supply of the laptops, the owner required some graphical explanation (shifting of demand and supply curves in each situation) and interpretation of each situation:

1- Draw a market situation which indicates the equilibrium price and quantity of Laptop.

2- What will be the effect on equilibrium Price and Quantity if demand of laptops increases but supply remains the same.

3- What will be the effect on equilibrium Price and Quantity if demand of laptops deceases but supply remains the same.

4- What will be the effect on equilibrium Price and Quantity if there is no change in demand but supply increased.

5- What will be the effect on equilibrium Price and Quantity if there is no change in demand but supply decreases.

6- What will be the effect on equilibrium Price and Quantity if there is equal increase in demand and supply of laptop.

7- What will be the effect on equilibrium Price and Quantity if there is equal decrease in demand and supply of laptop.

8- What will be the effect on equilibrium Price and Quantity if demand increases but supply decreases.

9- What will be the effect on equilibrium Price and Quantity if demand decreases but supply increases

10- What will be the effect on equilibrium Price and Quantity if both demand and supply decreases

Answer 1

1. A market situation which indicates the equilibrium price and quantity of Laptop can be shown as intersection of the supply and demand for laptops curves, the equilibrium price and quantity are in this intersection point.

2. If demand of laptops increases but supply remains the same, then the equilibrium price will increase, and the equilibrium quantity will increase.

3. If demand of laptops decreases but supply remains the same, then the equilibrium price will decrease, and the equilibrium quantity will decrease.

4. If there is no change in demand but supply increased, then the equilibrium price will decrease, and the equilibrium quantity will increase.

5. If there is no change in demand but supply decreases, then the equilibrium price will increase, and the equilibrium quantity will decrease.

6. If there is equal increase in demand and supply of laptop, then the equilibrium price will not change, and the equilibrium quantity will increase.

7. If there is equal decrease in demand and supply of laptop, then the equilibrium price will not change, and the equilibrium quantity will decrease.

8. If demand increases but supply decreases, then the equilibrium price will increase, and the equilibrium quantity will either increase, or decrease.

9. If demand decreases but supply increases, then the equilibrium price will decrease, and the equilibrium quantity will either increase, or decrease.

10. If both demand and supply decreases, then the equilibrium price will either increase, or decrease, and the equilibrium quantity will decrease.