Graph the supply and demand curves for rap music cd


Task: Demand and Supply Schedule for Rap Music CDs

Price

Quantity Demanded

Quantity Supplied

10

70 million

20 million

11

65  million

40 million

12

60 million

60 million

13

55 million

80 million

14

50 million

100 million


Question 1: Using the given supply and demand schedule above, graph the supply and demand curves for rap music CDs.  

Question 2: What are the equilibrium price and quantity? In other words, where is Qd = Qs?  What is the quantity that matches in both columns and what is the price at that point?

Question 3: At a price of $13, is there is shortage or surplus? How much is the shortage or surplus?

Question 4: Show graphically what happens to the market for rap music CDs if the price of CD players increases. What are the new equilibrium price and quantity? 

Suppose that the price of CD players increases.  CDs and CD players are goods typically consumed together, so they are called _________. 

If the price of CD players increases, people will buy fewer CD players.  That’s the Law of Demand.  However, they will also change their entire demand for rap music CDs as well.  Since they’ll be buying fewer CD players, will they need more or fewer CDs to play on the CD players they’re not buying?    _______  (more or fewer?)

Let’s suppose that the new demand schedule looks like this:

Price

Quantity Demanded

Quantity Supplied

10

45 million

20 million

11

40  million

40 million

12

35 million

60 million

13

30 million

80 million

14

25 million

100 million


What is the new equilibrium?  The new equilibrium quantity, where Qd = Qs,  is  ______ and the new equilibrium price, the price at which Qd = Qs, is $_________

Plot the new demand curve with the old one.  Is the new one to the left or the right of the old one?  __________ (left or right?)

If the new demand curve is on the right side of the old one, then demand has increased.  If the new demand curve is on the left side of the old one, then demand has decreased.  Which is it?  Did demand for rap music CDs increase or decrease?  _________

Finally, how did the equilibrium price and quantity change in direction? Did they increase or decrease? Equilibrium price of rap music CDs ______________ (increased or decreased?) after the price of the CD players increased. Equilibrium quantity of rap music CDs _______________ (increased or decreased?) after the price of the CD players increased.

Solution Preview :

Prepared by a verified Expert
Macroeconomics: Graph the supply and demand curves for rap music cd
Reference No:- TGS02097839

Now Priced at $25 (50% Discount)

Recommended (97%)

Rated (4.9/5)