BASIC FOUNDATIONAL ECONOMIC CONCEPT1Table of ContentsAnswer 1..........................................................................................................................................2Answer 2..........................................................................................................................................2Answer 3..........................................................................................................................................3Answer 4..........................................................................................................................................4
BASIC FOUNDATIONAL ECONOMIC CONCEPT2Answer 1 a) At the price of $40 quantity supplied equal to 10b) At the price of $100 quantity demanded equal to 10 c) At the price of $80 quantity supplied and quantity demanded are equal. At this price supplyand demand both equals 20.d) At a price of $100, quantity demanded is less than quantity supplied. At this price, quantitysupplied equals 25 and quantity demanded equals 10. Therefore, size of the surplus (25 – 10) =15 e) At a price of $20, quantity supplied is 5 and quantity demanded is 50. The size of shortagetherefore is (50 – 5) = 45 010203040506070$0 $20 $40 $60 $80 $100 $120 Quantity DemandedQuantity SuppliedQuantityPriceAnswer 2 a) At a price of $90, quantity demanded is equal to 2000b) At a price of $140, quantity demanded is equal to zero.
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