Answer to Question #121339 in Economics for sadia noor

Question

The following table represents the market for disposable Mask.

PRICE QUANTITY DEMANDED QUANTITY SUPPLIED
Rs. 5.00 15 0
Rs.10.00 13 3
Rs.15.00 11 6
Rs.20.00 9 9
Rs.25.00 7 12
Rs.30.00 5 15
Rs.35.00 3 18

a) Plot this data on a supply and demand graph and identify the equilibrium price and quantity.

b) Explain what would happen if the market price is set at Rs.30, and show this on the graph.

c) Explain what would happen if the market price is set at Rs.15, and show this on the graph.

Answer 1

a) Supply is an upward-sloping curve, and demand is a downward-sloping curve. They intersect in equilibrium point, the equilibrium price is 20, and quantity is 9.

b) If the market price is set at Rs.30, then there will be a surplus.

c) If the market price is set at Rs.15, then there will be a shortage.