Question

1) The following table shows the number of cases of bottled water each seller is willing to sell at the prices listed. (8 points) Dew Good Market Supply Price per Alpine case Springs $0.00 O cases $4.00 100 cases $8.00 200 cases $12.00 300 cases Brook Mountain O cases 40 cases 80 cases 120 cases Cascade Waters O cases 60 cases 120 cases 180 cases O cases 80 cases 160 cases 240 cases Market Demand 760 cases 660 cases 560 cases 460 cases a) Assuming the four companies listed are the only companies in the market, fill in the total quantity supplied to the market at each price (in place of the question marks) (4 points) b) Based on this information, give the function for market supply. Hint: It can be written as Q = -_ P. (2 points) c) What is the equilibrium price and quantity in this market? Explain your answer. (2 points)

Answer 1

AD brice seller Seller siller seller seller teller Market Market Supply Market Market demand IT V 560 90.000 10000 760 $4.00 I loo I 4o 60 so 280 1 660 & 8o0200 so 120 160 560 $12.001 300 I 120 180 240 840 460 a Quantity supplied at each price level = Sum of Ouantities supplied by all four sellers at each price level. b) The function can be written as: Q = 7ox P. og The equilibrium occurs at the point where Market demand = Market Supply. Thus, equilibrium Quantity=560 units. Equilibrium Price= 98.00