a) Derive the market demand and supply schedules from table 1.

Here are the solutions to your economics problem. a) Derive the market demand and supply schedules from table 1. To derive the market supply schedule, we sum the individual supply of Joyce and John at each price. To derive the market demand schedule, we sum the individual demand of Mary and Agbor at each price. Market Demand and Supply Schedules | Price (FCFA) | Individual Supply (Joyce) | Individual Supply (John) | Market Supply (Units) | Individual Demand (Mary) | Individual Demand (Agbor) | Market Demand (Units) | | :----------- | :------------------------ | :----------------------- | :-------------------- | :----------------------- | :------------------------ | :-------------------- | | 50 | 2 | 2 | 4 | 7 | 9 | 16 | | 100 | 3 | 3 | 6 | 6 | 8 | 14 | | 150 | 4 | 5 | 9 | 5 | 7 | 12 | | 200 | 5 | 7 | 12 | 4 | 5 | 9 | | 250 | 6 | 8 | 14 | 3 | 3 | 6 | | 300 | 7 | 9 | 16 | 2 | 2 | 4 | b)(i) On a graph paper provided derive the market demand and supply curves from the schedules, on a single graph. To derive the curves, plot the "Price (FCFA)" on the y-axis and "Market Supply (Units)" and "Market Demand (Units)" on the x-axis. • The Market Demand Curve will be downward sloping, connecting the points (16, 50), (14, 100), (12, 150), (9, 200), (6, 250), and (4, 300). • The Market Supply Curve will be upward sloping, connecting the points (4, 50), (6, 100), (9, 150), (12, 200), (14, 250), and (16, 300). The two curves will intersect at the equilibrium point. b)(ii) Estimate the equilibrium price and quantity from the graph. Step 1: Identify the point where market demand equals market supply. From the derived schedules, we observe: • At Price = 150 FCFA, Market Demand = 12 units and Market Supply = 9 units. • At Price = 200 FCFA, Market Demand = 9 units and Market Supply = 12 units. The equilibrium lies between these two price points. Step 2: Estimate the equilibrium price and quantity by interpolation. The equilibrium occurs where the quantity demanded equals the quantity supplied. By plotting the points and observing the intersection, or by linear interpolation, we can estimate: Equilibrium Price = 175 FCFA Equilibrium Quantity = 10.5 units c) State the three laws of demand and supply shown by the graph. • Law of Demand: As the price of a good increases, the quantity demanded for that good decreases, assuming all other factors remain constant. This is reflected in the downward-sloping demand curve. • Law of Supply: As the price of a good increases, the quantity supplied of that good increases, assuming all other factors remain constant. This is reflected in the upward-sloping supply curve. • Law of Equilibrium: In a free market, the forces of demand and supply will naturally push the market price and quantity towards an equilibrium point where the quantity demanded equals the quantity supplied. d) Outline two reasons for the shape of: (i) The demand curve • Law of Diminishing Marginal Utility: As a consumer consumes more units of a good, the additional satisfaction (marginal utility) derived from each successive unit decreases. Therefore, consumers are only willing to buy additional units if the price is lower. • Income Effect: When the price of a good falls, consumers' real income (purchasing power) effectively increases, allowing them to afford and demand more of the good. (ii) The supply curve • Profit Motive: Producers are motivated by profit. As the market price of a good increases, it becomes more profitable to produce and sell that good, encouraging firms to increase their output. • Increasing Marginal Costs: As firms increase production, they often face increasing marginal costs (the cost of producing one additional unit). To cover these higher costs and maintain profitability, firms require a higher price for each additional unit supplied. 3 done, 2 left today. You're making progress.