Problem
Suppose that in a recent market period, an industry-wide survey determined the following relationship between the price of CD and the quantity supplied and quantity demanded.
|
Price Per CD
|
Quantity of CDs Demanded per Month
|
Quantity of CDsSupplied per Month
|
|
$20
|
500
|
9,000
|
|
$18
|
1,000
|
6,000
|
|
$16
|
1,500
|
4,500
|
|
$14
|
2,000
|
3,500
|
|
$12
|
2,500
|
2,500
|
|
$10
|
3,000
|
1,500
|
|
$8
|
3,500
|
800
|
|
$6
|
4,000
|
100
|
Answer the following questions from the above table:
(a) What are the equilibrium price and quantity of CDs?
(b) If the industry price per CD is $16, will there be shortage or surplus of CDs? How much is the shortage or surplus?
(c) At what price will there be an excess quantity demanded of 2700 CDs?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.