Price Quantity Demanded Quantity Supplied
$9 100 Million 40 Million
$10 90 Million 60 Million
$11 80 Million 80 Million
$12 70 Million 100 Million
$13 60 Million 120 Million
Illustrate the supply and demand curves for music CD's as per the information given in the table and answer these questions.
What are the equilibrum price & quantity?
If the industry price is $10, is there a shortage or surplus of CD's?
How much of a shortage or surplus?
Suppose in another market quantities supplied are unchanged but the quantity demanded increases by 30 million at each price, construct this demand curve and complete the following:
Is this an increase or a decrease in demand?
What are the new equilibrium quantity and the new market price?
Give 2 reasons that might cause such a change to occur.