Demand and supply often shift in the retail market for gasoline. Here are two demand curves and two supply curves for gallons of gasoline in the month of May in a small town in Maine. Some of the data are missing. Using the table, answer the following questions: Quantities Demanded Quantities Supplied Price D1 D2 S1 S2 $ 4.00 5,000 7,500 9,000 9,500 6,000 8,000 8,000 9,000 2.00 8,500 8,500 9,000 5,000 Instructions: Enter your answers as whole numbers. A) use the following facts to fill in the missing data in the table. If demand is D1 and supply is S1, the equilibrium quantity is 7,000 gallons per month. When demand is D2 and suppy is S1, the equilibrium price is $ 3.00 per galllon. When demand is D2 and supply is S1, there is an excess demand of 4,000 gallons per month at a price of $ 1.00 per gallon. If demand is D1 and supply is S2, the equilibrium quantity is 8,000 gallons per month. B) Compare the two equilibriums. In the first, deamnd is D1 and supply is S1. In the second, demand is D1 and supply is S2. By how much does the equilibrium quantity change? By how much does the equilibrium price change? C) If supply falls from S2 to S1 while demand simultaneously declines from D2 to D1, does the equilibrium price rise, fall, or stay the same? What if only supply falls? What if only demand falls? Suppose that supply is fixed at S1 and the demand starts at D1. By how many gallons per month would demand have to increase at each price level such that the equilibrium price per gallon would be $ 3.00? $ 4.00 ?
Using the table, answer the following questions:
Quantities Demanded Quantities Supplied
| D1 | D2 | S1 | S2 | |
| $ 4.00 | 5,000 | 7,500 | 9,000 | 9,500 |
| 6,000 | 8,000 | 8,000 | 9,000 | |
| 2.00 | 8,500 | 8,500 | ||
| 9,000 | 5,000 |
Instructions: Enter your answers as whole numbers.
A) use the following facts to fill in the missing data in the table. If demand is D1 and supply is S1, the equilibrium quantity is 7,000 gallons per month. When demand is D2 and suppy is S1, the
B) Compare the two equilibriums. In the first, deamnd is D1 and supply is S1. In the second, demand is D1 and supply is S2. By how much does the equilibrium quantity change? By how much does the equilibrium price change?
C) If supply falls from S2 to S1 while demand simultaneously declines from D2 to D1, does the equilibrium price rise, fall, or stay the same? What if only supply falls? What if only demand falls?
Suppose that supply is fixed at S1 and the demand starts at D1. By how many gallons per month would demand have to increase at each price level such that the equilibrium price per gallon would be $ 3.00? $ 4.00 ?
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