The demand and supply curves for T-shirts in Touristtown, U.S.A., are given by the following equations:
Q = 24,000 - 500P
Q5 6,000 + 1,000P
where P is measured in dollars and Q is the number of T-shirts sold per year.
a. Find the equilibrium price and quantity algebraically.
b. If tourists decide they do not really like T-shirts that much, which of the following might be the new demand curve?
Q = 21,000- 500P
Q = 27,000- 500P
Find the equilibrium price and quantity after the shift of the demand curve.
c. If, instead, two new stores that sell T-shirts open up in town, which of the following might be the new supply curve?
Q = 4,000 + 1,000P
Q= 9,000 + 1,000P
Find the equilibrium price and quantity after the shift of the supply curve.