i. Using the “new demand” in the figure shown below as a guide, determine the size of the market surplus or shortage that would exist at a price of (a) $40 and (b) $20.A step by step solution would truly help! PRICE OF TUTORING (per hour)$504540353025201510525SHIFT ofdemandE₁E₂Market supplyInitial demand5075100QUANTITY (hours per semester)New demand125Demand shifts if• Tastes change.• Incomes change.• Price/availabilityof other goodschange.•Expectationschange.150UU

The demand curve is the curve that shows the willingness to buy or consume a particular good. It…

Answered: i. Using the “new demand” in the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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i. Using the “new demand” in the figure shown below as a guide, determine the size of the market surplus or shortage that would exist at a price of (a) $40 and (b) $20.

A step by step solution would truly help!

PRICE OF TUTORING (per hour)
$50
45
40
35
30
25
20
15
10
5
25
SHIFT of
demand
E₁
E₂
Market supply
Initial demand
50
75
100
QUANTITY (hours per semester)
New demand
125
Demand shifts if
• Tastes change.
• Incomes change.
• Price/availability
of other goods
change.
•Expectations
change.
150
U
U

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