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Chapter 3: Q 17. (page 78)

How can you locate the equilibrium point on a demand and supply graph?

Short Answer

Expert verified

On a demand and supply graph, the equilibrium point can be found where the demand and supply curves intersect

Step by step solution

01

Step 1. Define equilibrium point.

The point of intersection of the demand curve and the supply curve for a commodity is known as the equilibrium point.

02

Step 2. On a demand and supply graph, how do you get the equilibrium point? 

On a demand and supply graph, the equilibrium point can be found where the demand and supply curves intersect. Price is on the x axis on both the demand and supply curves, and quantity demanded is on the y axis.

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Most popular questions from this chapter

Why would a free market never operate at a quantity greater than the equilibrium quantity? Hint: What would be required for a transaction to occur at that quantity?

When the price is above the equilibrium, explain how market forces move the market price to equilibrium. Do the same when the price is below the equilibrium.

What determines the level of prices in a market?

A low-income country decides to set a price ceiling on bread so it can make sure that bread is affordable to the poor. Table 3.11 provides the conditions of demand and supply. What are the equilibrium price and equilibrium quantity before the price ceiling? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at \(2.40? At \)2.00? At $3.60?

Use the four-step process to analyze the impact of a reduction in tariffs on imports of iPods on the equilibrium price and quantity of Sony Walkman-type products.
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