Price of a chocolate bar (cents) 50 40 30 20 10 5 Quantity demanded per month 100,000 150,000 200,000 260,000 330,000 400,000 Quantity supplied per month 420,000 300,000 200,000 120,000 60,000 40,000 On graph paper plot the demand and supply curves for chocolate bars on one graph with 'Price of a chocolate bar' on the vertical axis and 'Quantity per month' along the bottom axis. 1 Using the above table state at which price demand equals supply. This will be the market price for chocolate bars because at that price producers are willing to make and sell just as many bars as consumers are willing to buy. 2 a 4 a Find the market price of chocolate bars using your demand and supply curves. b What is the quantity of chocolate bars traded at this price in the market? 3 a When the quantity demanded is greater than the quantity supplied economists say there is an excess demand. At which prices in the table is there an excess demand for chocolate bars? b Similarly, when the quantity supplied exceeds the quantity demanded there is said to be an excess supply. At which prices in the table is there an excess supply of chocolate bars? If there is excess demand what do you think will happen to the price of chocolate bars? b If there is excess supply what do you think will happen to their price? At which price will there be no excess demand or supply? с
Price of a chocolate bar (cents) 50 40 30 20 10 5 Quantity demanded per month 100,000 150,000 200,000 260,000 330,000 400,000 Quantity supplied per month 420,000 300,000 200,000 120,000 60,000 40,000 On graph paper plot the demand and supply curves for chocolate bars on one graph with 'Price of a chocolate bar' on the vertical axis and 'Quantity per month' along the bottom axis. 1 Using the above table state at which price demand equals supply. This will be the market price for chocolate bars because at that price producers are willing to make and sell just as many bars as consumers are willing to buy. 2 a 4 a Find the market price of chocolate bars using your demand and supply curves. b What is the quantity of chocolate bars traded at this price in the market? 3 a When the quantity demanded is greater than the quantity supplied economists say there is an excess demand. At which prices in the table is there an excess demand for chocolate bars? b Similarly, when the quantity supplied exceeds the quantity demanded there is said to be an excess supply. At which prices in the table is there an excess supply of chocolate bars? If there is excess demand what do you think will happen to the price of chocolate bars? b If there is excess supply what do you think will happen to their price? At which price will there be no excess demand or supply? с
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Finding the market price
Consider the market demand and supply schedules for chocolate bars.
Price of a chocolate
bar (cents)
50
40
30
20
10
5
Quantity demanded
per month
100,000
150,000
200,000
260,000
330,000
400,000
Quantity supplied per
month
420,000
300,000
200,000
120,000
60,000
40,000
On graph paper plot the demand and supply curves for chocolate bars on one
graph with 'Price of a chocolate bar' on the vertical axis and 'Quantity per
month' along the bottom axis.
1 Using the above table state at which price demand equals supply.
This will be the market price for chocolate bars because at that price
producers are willing to make and sell just as many bars as consumers are
willing to buy.
2 a Find the market price of chocolate bars using your demand and
supply curves.
b
3
What is the quantity of chocolate bars traded at this price in the market?
a When the quantity demanded is greater than the quantity supplied
economists say there is an excess demand. At which prices in the table is
there an excess demand for chocolate bars?
b Similarly, when the quantity supplied exceeds the quantity demanded
there is said to be an excess supply. At which prices in the table is there
an excess supply of chocolate bars?
4 a If the is excess demand what do you think will happen to the price of
chocolate bars?
b If there is excess supply what do you think will happen to their price?
с
At which price will there be no excess demand or supply?
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