Q16 **Title: Understanding Demand and Supply Curves in Market Economics**An economist estimates that a market has a **demand curve** represented by the equation $ P = 34 - (1.13) Q $ and a **supply curve** represented by the equation $ P = 8.5 + (1.02) Q $. These curves are illustrated in the graph below.**Graph Explanation:**The graph features:- **Axes:** - The vertical axis represents the price ($ P $). - The horizontal axis represents the quantity ($ Q $).- **Demand Curve (Blue Line):** - Slopes downward from left to right, indicating that as price decreases, the quantity demanded increases.- **Supply Curve (Red Line):** - Slopes upward from left to right, indicating that as price increases, the quantity supplied increases.- **Equilibrium Point (E):** - The intersection of the demand and supply curves. - At this point, the equilibrium price ($ P_e $) and equilibrium quantity ($ Q_e $) are determined.**Market Analysis:**By her estimations, if the price in the market is currently at a certain level, then there should be a shortage on the market of a specific number of units. Choose the correct price and shortage combination from the options below:- A. $12.10; 15.85- B. $20.6; 17.54- C. $30.00; 11.86- D. $9.00; 7.52**Conclusion:**This exercise helps in understanding how demand and supply curves interact to determine the market equilibrium and how variations in price can lead to surpluses or shortages.

Given, Demand- 34-(1.13)q Supply- 8.5+(1.02)Q

An economist estimates thata market has a demand curve of the form P = 34 - (1.13) Q and a supply curve of the form P= 8.5 + (1.02) Q. (See the curves graphed in the figure below.) By her estimations, if the price in the market is currently at then there should be a shortage on the market of units. Supply Demand

An economist estimates thata market has a demand curve of the form P = 34 - (1.13) Q and a supply curve of the form P= 8.5 + (1.02) Q. (See the curves graphed in the figure below.) By her estimations, if the price in the market is currently at then there should be a shortage on the market of units. Supply Demand

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Chapter1: Making Economics Decisions

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Concept explainers

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

Q16

**Title: Understanding Demand and Supply Curves in Market Economics**

An economist estimates that a market has a **demand curve** represented by the equation $ P = 34 - (1.13) Q $ and a **supply curve** represented by the equation $ P = 8.5 + (1.02) Q $. These curves are illustrated in the graph below.

**Graph Explanation:**

The graph features:
- **Axes:**
- The vertical axis represents the price ($ P $).
- The horizontal axis represents the quantity ($ Q $).

- **Demand Curve (Blue Line):**
- Slopes downward from left to right, indicating that as price decreases, the quantity demanded increases.

- **Supply Curve (Red Line):**
- Slopes upward from left to right, indicating that as price increases, the quantity supplied increases.

- **Equilibrium Point (E):**
- The intersection of the demand and supply curves.
- At this point, the equilibrium price ($ P_e $) and equilibrium quantity ($ Q_e $) are determined.

**Market Analysis:**

By her estimations, if the price in the market is currently at a certain level, then there should be a shortage on the market of a specific number of units. Choose the correct price and shortage combination from the options below:

- A. $12.10; 15.85
- B. $20.6; 17.54
- C. $30.00; 11.86
- D. $9.00; 7.52

**Conclusion:**

This exercise helps in understanding how demand and supply curves interact to determine the market equilibrium and how variations in price can lead to surpluses or shortages.

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