a.b.Test Your UnderstandingPriceSupply 1$4.00604.25704.50804.7590(5.001005.251105.50120What are equilibrium price and quantity?Supply increases by 50% - what are the new equilibriumprice and quantity?Demand14013012011010090802014 McGraw-Hill Ryerson LimitedSupply 2LO62-45

The following information about price, demand and supply is provided:Price DemandSupply…

Demand 140 130 120 110 100 90 80 Supply 1 60 Price $4.00 4.25 70 4.50 80 4.75 90 (5.00 100 5.25 110 5.50 120 a. What are equilibrium price and quantity? b. Supply increases by 50% - what are the new equilibrium price and quantity? Supply 2 2014 McGraw-Hill Ryerson Limited 2-45

Demand 140 130 120 110 100 90 80 Supply 1 60 Price $4.00 4.25 70 4.50 80 4.75 90 (5.00 100 5.25 110 5.50 120 a. What are equilibrium price and quantity? b. Supply increases by 50% - what are the new equilibrium price and quantity? Supply 2 2014 McGraw-Hill Ryerson Limited 2-45

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter4: Markets In Action

Section: Chapter Questions

Problem 2SQ

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Question

a.
b.
Test Your Understanding
Price
Supply 1
$4.00
60
4.25
70
4.50
80
4.75
90
(5.00
100
5.25
110
5.50
120
What are equilibrium price and quantity?
Supply increases by 50% - what are the new equilibrium
price and quantity?
Demand
140
130
120
110
100
90
80
2014 McGraw-Hill Ryerson Limited
Supply 2
LO6
2-45

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Step 3: b) Find the new equilibrium if Supply increases by 50%

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