Answer to Question #268285 in Microeconomics for Aina

Question

The following table shows the daily supply and demand for chicken burgers at a sporting event:

Price (RM) Quantity demand (units) Quantity supply (units)

4.00 110 420

3.50 160 380

3.00 240 240

2.50 320 160

2.00 410 96

a) What is the equilibrium price of chicken burgers? Discuss your reason.

b) If the organizer of this sporting event decide to set the price at RM4.00, how many chicken burgers should be sold? Write your answer.

c) One of the burger stall in this sporting event is offering free fries for every 3 chicken burgers purchased but customers. Describe how does this offer may affect customers demand?

Answer 1

(a)

The equilibrium price$=RM 3.00$

At this price, the quantity of chicken burgers demanded is equal to the quantity supplied.

(b)

At RM 4.00, the quantity of chicken burgers sold =110.

This is because it is the quantity that is demanded at that particular price.

(c)

The offer raises consumers' preference for burgers and therefore customers' demand for the chicken burgers will increase.