Answer to Question #87016 in Microeconomics for leeRa

Question

2. The demand and Supply Schedules for potato chips are:
Price(rand per bag)
Quantity demanded(millions of bags a week)
Quantity Supplied(millions of bags a week)
5
160
130
6
150
140
7
140
150
8
130
160
9
120
170
10
110
180




a. Draw a graph of the potato chip market and mark in the equilibrium price and quantity. (10 marks)
b. if the price is R6 a bag, is there a shortage or a surplus and how does the price adjust? (5 marks)

Answer 1

0.1x-8=-0.1x+21

0.2x=29

x=145- Equilibrium quantity.

0.1*145-8=6.5 Equilibrium price

If the price is R6 a bag, is there a shortage and price will rise.