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This shows the variables that will determine how much of a good will be supplied.

Economics

ScanSolve AI Answer

Answer

3
60,000

Step-by-step solution

3 steps
  1. Identify the demand and supply schedules.

    The table provides the quantity demanded (Qdx) and quantity supplied (QS) at various prices (P).

    Demand Schedule (P, Qdx):

    • $(6, 0)$
    • $(5, 20,000)$
    • $(4, 40,000)$
    • $(3, 60,000)$
    • $(2, 80,000)$
    • $(1, 100,000)$
    • $(0, 120,000)$

    Supply Schedule (P, QS):

    • $(6, 120,000)$
    • $(5, 100,000)$
    • $(4, 80,000)$
    • $(3, 60,000)$
    • $(2, 40,000)$
    • $(1, 20,000)$
    • $(0, 0)$
  2. Plot the demand and supply curves on the graph.

    To plot the demand curve, mark the points from the Demand Schedule on the graph. For example, at P=6P=6, Q=0Q=0; at P=5P=5, Q=20,000Q=20,000; and so on. Connect these points to form the demand curve.
    To plot the supply curve, mark the points from the Supply Schedule on the graph. For example, at P=6P=6, Q=120,000Q=120,000; at P=5P=5, Q=100,000Q=100,000; and so on. Connect these points to form the supply curve.

  3. Determine the equilibrium price and quantity.

    Equilibrium occurs where the quantity demanded equals the quantity supplied (Qdx=QSQdx = QS). From the table, we look for the row where QdxQdx and QSQS are the same.

    PQdxQS
    60120,000
    520,000100,000
    440,00080,000
    360,00060,000
    280,00040,000
    1100,00020,000
    0120,0000

    The equilibrium is found at P=3P=3 where Qdx=QS=60,000Qdx = QS = 60,000. This is also the point where the demand and supply curves would intersect on the graph.

    The equilibrium price is 3\boxed{3} and the equilibrium quantity is 60,000\boxed{60,000}.

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