Answer to Question #121548 in Economics for Mehwish

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

c) If the market price is set at Rs.15, then it will be below the equilibrium, so the quantity demanded will be higher than the quantity supplied, so there will be a shortage.