Answer to Question #268286 in Microeconomics for Aina

Question

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

Answer 1

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.

Answer: Price (RM) 3.00

The equilibrium price is the only price where the desires of consumers and the desires of producers agree—that is, where the amount of the product that consumers want to buy (quantity demanded) is equal to the amount producers want to sell (quantity supplied).