Demand and supply - short answer
Interaction of demand and supply
Question 1
The data in the table below shows the demand and supply for digital cameras at various prices.
Price (£) | Quantity demanded (millions per year) | Quantity supplied (millions per year) |
---|---|---|
16 | 140 | 20 |
32 | 120 | 60 |
48 | 100 | 100 |
64 | 80 | 140 |
80 | 60 | 180 |
(a) Plot the demand and supply curves on a diagram.
(b) What would be the excess demand or supply if the price was set at £32?
(c) What would be the excess demand or supply if the price was set at £80?
(d) What is the equilibrium price and quantity?
(e) If income rises and demand, as a result, rises by 20 million units at each level, what will be the new equilibrium price?
Question 2
In the table below tick the appropriate column to show the impact of the change given on the market for cinema tickets.
Change | Demand shift right | Demand shift left | Supply shift right | Supply shift left |
---|---|---|---|---|
There is an increase in real incomes | ||||
Stelios Haji-Ioannou rolls out the EasyCinema low price model nationwide | ||||
The commission paid to film distributors by the cinemas falls | ||||
Planning law changes to restrict the development of out-of-town entertainment complexes | ||||
Pay-per-view cable, satellite and internet film services are developed and grow in popularity | ||||
Spiralling film production costs mean fewer new releases | ||||
Cinema operators develop new premium services |