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Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 3SCQ: In an analysis of the market for paint, an economist discovers the facts listed below. State whether...

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10. Market equilibrium

The following table shows the monthly demand and supply in the market for shoes in Dallas.

Price	Quantity Demanded	Quantity Supplied
(Dollars per pair of shoes)	(Pairs of shoes)	(Pairs of shoes)
20	1,100	200
40	900	400
60	800	500
80	600	900
100	500	1,200

On the following graph, plot the demand for shoes using the blue point (circle symbol). Next, plot the supply of shoes using the orange point (square symbol). Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for shoes.

Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.

DemandSupplyEquilibrium020040060080010001200120100806040200PRICE (Dollars per pair of shoes)QUANTITY (Pairs of shoes)

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Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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