Consider the following supply and demand model. New Quantity Supplied Quantity Price Quantity Supplied Price Demanded $5.00 40 70 $5.00 4.00 50 65 4.00 3.00 60 60 3.00 2.00 70 55 2.00 1.00 80 50 1.00 A. Draw the supply and demand curves. Label the equilibrium price and quantity. B. Is there a shortage or surplus at a price of $4.00? How much? C. Is there a shortage or surplus at a price of $1.00? How much? Suppose the government imposes a tax on this product, changing the quantity supply by 15 at each price level. D. Using the same graph provided in (A), add the new supply curve, and label S2. E. Label the new equilibrium price and quantity.

Consider the following supply and demand model. New Quantity Supplied Quantity Price Quantity Supplied Price Demanded $5.00 40 70 $5.00 4.00 50 65 4.00 3.00 60 60 3.00 2.00 70 55 2.00 1.00 80 50 1.00 A. Draw the supply and demand curves. Label the equilibrium price and quantity. B. Is there a shortage or surplus at a price of $4.00? How much? C. Is there a shortage or surplus at a price of $1.00? How much? Suppose the government imposes a tax on this product, changing the quantity supply by 15 at each price level. D. Using the same graph provided in (A), add the new supply curve, and label S2. E. Label the new equilibrium price and quantity.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 8PA

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