Question

Suppose that in a recent market period,the following relationship existed between the price of

tablet devices and the quantity supplied and quantity demanded.

Graph the supply and demand curves for tablet

devices using the information in the table.What are

the equilibrium price and quantity?If the industry

price is$340,is there a shortage or surplus of tablet

devices?How much is the shortage or surplus?

Short answer

i) Equilibrium- 350$ and 80 million.

ii) Shortage of 30 million.

Step-by-step solution

Step1. Given information

The following schedule is given:

Step2. i) Explanation

Following is the demand and supply graph with prices as 330, 340, 350.. 370 corresponding to the mentioned quantities in schedule as 40, 60, 80.. 120 million.

The equilibrium is hence established at price= $350 and quantity= 80 million.

Step3. ii) Explanation

Industry price= $340. The equilibrium is at $350. Hence, there is a shortage of 90-60= 30 millions.