The following table summarizes demand data for a market. At each price, the quantity demanded by Jones, Smith, and all other buyers (besides Jones and Smith) is shown. For each price in the table, enter the number of units demanded by all buyers (Smith, Jones, and all other buyers) to complete the market demand schedule.   Quantity Demanded Price Jones Smith Other Buyers $25 12 14 70   $24 15 16 95   $23 18 18 120   $22 21 20 145   $21 24 22 170   $20 27 24 195

Quantity Demanded 400,000 330,000 260,000 200,000 150,000 100,000 Price of Apples Quantity Supplied 40,000 60,000 120,000 200,000 300,000 420,000 10 20 30 40 50 6. Using the table above plot the information in a supply and demand graph 7. At what quantity and price (market price) is there an equilibrium? 8. At what price is their excess demand? 9. At what price is their excess supply? 10. If there is excess demand what do you think will happen? 11. If there is excess supply what do you think will happen?

6. The variety of demand curves The following graph displays four demand curves (PP, QQ, RR, and SS) that intersect at point V. PRICE (Dollars per unit) 20 18 16 14 12 10 po 4 2 19 0 # + 0 P 2 D +XX W R + + 4 6 > S + S N 8 10 12 QUANTITY (Units) R P + + → 14 16 18 20 (? Using the graph, complete the table that follows by indicating whether each statement is true or false. Statement Between points V and Y, curve RR is inelastic. Between points V and W, curve PP is unit elastic. Curve QQ is more elastic between points V and X than curve RR is between points V and Y. True False

2. Suppose that annual demand in the U.S. market for ice cream cones can be expressed as QD = 800 + .2I - 100P, where QD is the number of cones demanded in millions of cones, I equals average monthly income in dollars, and P is price in dollars per cone.  Supply can be expressed as QS = 200 + 150P (with the same units for quantity and price).   A.    Graph the demand and supply curves for ice cream cones, assuming that average monthly income is $2,000, and solve for the equilibrium price and quantity.   B.     Now assume that the average monthly income drops to $750 and supply is unchanged. Draw the new demand curve on the same graph as used in (a) above and solve for the new equilibrium price and quantity.            How would you describe the shift in demand intuitively?