Chapter 3, Problem 21P

To determine

Plotting on graph the relevant information
(a) Demand and supply curves
(b) The tires of pickup trucks found to be defective.
(C) Imposition of costly regulations on the manufacturers of trucks.

Concept Introduction

Demand: The demand of a product or service in the market is derived by the willingness to purchase and ability of the consumers to pay for the purchase.

Supply: The supply of a product or service means making available a specific product or service to the consumers at a specific price.

Equilibrium Price: The equilibrium price is the market price at which the quantity demanded by the consumers equals the quantity supplied by the producers.

Equilibrium Quantity: The equilibrium quantity is that quantity where the demand and supply of a product or service is equal.