Complete the following table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and whether this places upward or downward pressure on prices. Price (Dollars per jacket) 40 60 Shortage or Surplus Shortage or Surplus Amount (Jackets) Pressure
Complete the following table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and whether this places upward or downward pressure on prices. Price (Dollars per jacket) 40 60 Shortage or Surplus Shortage or Surplus Amount (Jackets) Pressure
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:Complete the following table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus,
and whether this places upward or downward pressure on prices.
Price
(Dollars per jacket) Shortage or Surplus
40
60
Shortage or Surplus Amount
(Jackets)
Pressure
Transcribed Image Text:The following graph shows the monthly demand and supply curves in the market for jackets.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
PRICE (Dollars per jacket)
100
90
80
70
60
50
40
30
20
10
0
0
==++
Supply
Demand
50 100 150 200 250 300 350 400 450 500
QUANTITY (Jackets)
The equilibrium price in this market is $
Graph Input Tool
Market for Jackets
Price
(Dollars per jacket)
Quantity
Demanded
(Jackets)
per jacket, and the equilibrium quantity is
30
500
Quantity Supplied
(Jackets)
jackets per month.
?
210
Expert Solution
Step 1
Equilibrium in the market occurs at the intersection of market demand and market supply curve.
If quantity demanded > quantity supplied, then there is a shortage in the market and it puts upward pressure on the market price.
Shortage = Quantity demanded - Quantity supplied.
---------------------------------------------------------
If quantity demanded < quantity supplied, then there is a surplus in the market and it puts downward pressure on the market price.
Surplus = Quantity supplied - Quantity demanded
-------------------------------------------------------
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