Answer to Question #315388 in Microeconomics for Axis

Question

5. Consider the demand and supply functions for the notebooks market.

𝑄𝐷=10,000−100𝑝 𝑄𝑆=900𝑝

a. Make a table with the corresponding supply and demand schedule.

b. Draw the corresponding graph.

c. Is it possible to find the price and quantity of equilibrium with the graph method?

d. Find the price and quantity of equilibrium by solving the system of equations.

6. Supply and demand functions show different relationships between the price and quantities supplied and demanded. Explain the reason for that relation.

Answer 1

What a buyer is willing to pa for a unit of the specific good or service is called price. The total quantity of units purchased at that price is called the quantity demanded. A rise in price of a good or service almost always decreases the quantity demanded of that good or service.

On the other hand the quantity that companies are willing to inject into the market at a prevailing market price is called supply.An increase in the price will result to increase in the quantity supplied while a decrease in price will result in a drop in the supplied quantity.