The demand and supply of widgets is given below. Q is quantity, and P is price of widgetsQ = 5000 – 6PQ = 1000 + 2PHow much is equilibrium quantity and equilibrium price (show me your work)If there is a price control of $700 imposed by the government for widgets. What type of price control is this called? Does this type of price control cause a shortage or surplus, and how much is it. Draw the Demand and Supply, and show the point for part a and b.

Answered: The demand and supply of widgets is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The demand and supply of widgets is given below. Q is quantity, and P is price of widgets

Q = 5000 – 6P

Q = 1000 + 2P

How much is equilibrium quantity and equilibrium price (show me your work)
If there is a price control of $700 imposed by the government for widgets. What type of price control is this called? Does this type of price control cause a shortage or surplus, and how much is it.
Draw the Demand and Supply, and show the point for part a and b.

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

Expert Solution

Step 1: Define demand and supply

Demand is the desire backed by a willingness to pay and the ability to pay by an individual. The summation of all individual demand curves is known as market demand. As price increases market demand will decrease and vice versa. Supply is defined as the amount of goods that are produced in the place of consumption by an individual. It shows the direct relationship between price and quantity suppliers. A major determinant that affects supply is the price of the commodity. When demand and supply are equal the market is in equilibrium.

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