Question

2 Quiz う С 을 http:// In Kirin, at a market price of $1 per kilo, there is a shortage of 20 kilos of avocados. For each 50-cent Increase in the price. the quantity demanded drops by 10 kilos, while the quantity supplied increases by 10 kilos. a. Complete the table below by increasing the price in S0.50 increments shortage in the last row Remember to include a minus sign Θ when indicating a 5 points Price 015241 c. At a price of $300 there will be a Cick to seledy or

Answer 1

As per given information, At price 1, supply quantity in 190 and there in shortage of -20.

Hence, Demand will be 190+20 = 210

Given that for every 0.5 increase in price, supply will increase by 10 and demand will reduce by 10. Means if cost will be 1.5,

Then supply will be 190+10 = 200

And Demand will be 210-10 = 200

Shortage will be 200-200 =0

So, in a similar way we can find the data with other incremental price as well.

Final table will be as mentioned below-

Price	1	1.5	2	2.5	3	3.5	4	4.5	5
Quantity Supplied	190	200	210	220	230	240	250	260	270
Quantity Demanded	210	200	190	180	170	160	150	140	130
Shortage	-20	0	+20	+40	+60	+80	+100	+120	+140

Equilibrium price is that price at which demand matches supply.

As per above mentioned table, At price $1.5, demand and supply matches.

Equilibrium Price = 1.5

At price 3, there will be over supply of 60 kilo.