Question 10 Suppose the following table shows the quantity of laundry detergent that is demanded and supplied at various prices in Country 1.
P ($) Quantity Demanded (million oz.) Quantity Supplied (million oz.) 2 65 35 4
60 40 6
55 45 8
50 50 10 45 55 12 40 60 14 35 65 a. Use the data in the table to draw the demand and supply curves in the market for laundry detergent. b. What is the equilibrium price and quantity in the market c. The following tables give the demand and supply schedules for two
of its neighbouring countries, Country 2 and Country 3. Suppose these three countries decide to form an economic union and integrate their markets. Use the data in the table to plot the market demand and supply curves in the newly formed economic union. What is the equilibrium price and quantity in the market Country 2:
P ($) Quantity Demanded (million oz.) Quantity Supplied (million oz.) 2 35 5
4 30 10 6
25 15 8
20 20 10 15 25 12 10 30 14 5
35 Country 3:
P ($) Quantity Demanded (million oz.) Quantity Supplied (million oz.) 2 40 10 4
35 15 6
30 20 8
25 25 10 20 30 12 15 35 14 10 40
Question 11 Demand for books is given by the following table. Price ($)
Quantity of books demanded 0 1000 20 600 40 200 60 0 a. Plot each point on a well-labeled diagram, with quantity on the x-axis and price on the y-axis. b. Assume that the demand curve is linear between each of the points in the demand schedule above.
Using this assumption, connect the dots with straight lines. What is the quantity demanded when the price is $10? c. Assume the Law of Demand is true. Also assume the information provided by the demand schedule is correct. However, make no other assumptions. In particular, you should no longer assume that the demand curve is linear between the points in the demand schedule. What can you say about the quantity demanded when the price is $25?
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