The diagram to the right is a basic supply and demand graph. Economists use it to analyze equilibrium price and quantity in a market. When price equals $8, a surplus occurs. 1.) Using the line drawing tool, draw a horizontal line from the $8 value on the vertical axis to represent the surplus. Label this line 'Price". 2.) Using the point drawing tool, locate quantity demanded (label the point P₁) and quantity supplied (label the point P₂) at this price of $8. Carefully follow the instructions above and only draw the required objects. The amount of the surplus is units. This surplus will cause price to fall to equilibrium level. 10.00 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00+ 0 Price per unit (S) 10 20 30 40 50 60 S D 70 80 90 100

The diagram to the right is a basic supply and demand graph. Economists use it to analyze equilibrium price and quantity in a market. When price equals $8, a surplus occurs. 1.) Using the line drawing tool, draw a horizontal line from the $8 value on the vertical axis to represent the surplus. Label this line 'Price". 2.) Using the point drawing tool, locate quantity demanded (label the point P₁) and quantity supplied (label the point P₂) at this price of $8. Carefully follow the instructions above and only draw the required objects. The amount of the surplus is units. This surplus will cause price to fall to equilibrium level. 10.00 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00+ 0 Price per unit (S) 10 20 30 40 50 60 S D 70 80 90 100

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Step 1: Draw a supply-and-demand diagram. Price is on the vertical axis, quantity is on the horizontal axis, demand is downward-sloping, supply is upward- sloping, and be sure to label equilibrium price and equilibrium quantity.
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For the questions that follow complete the steps below in order: 1. Read the scenario 2. Determine if the scenario represents a change in supply (TIGERS) or demand (TIRES) 3. Draw a supply and demand graph labeling all axis and curves 4. Draw the correct curve shifting and label that you determined in #2 above 5. Draw an arrow showing price increasing or decreasing in the space provided You can complete this on a separate sheet of paper or directly on the assignment and then upload to the review market equilibrium dropbox. An example has been provided for you. Example: New technology is found that increases productivity in all pizzerias across the country. How will this affect the market for pizza? This will affect the supply curve because it is technology. Technology is a determinant of supply. It will increase the supply of pizza and so the supply curve will shift to the right. P P1 P2 S D Q1 Q2 Q S2 In this case from the first equilibrium point to the second price decreases and…
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I need help with 4,5, and 6
a) Where does equilibrium occur in the market diagram? b) Describe what would happen in the market if price is incorrectly set above the equilibrium price. c) Describe what would happen in the market if price is incorrectly set below the equilibrium price.