Practise combining demand and supply to determine equilibrium, trace simultaneous shifts, calculate shortages or surpluses and explain joint demand, joint supply and price…
The equation for the quantity demanded, QD, for a product is
where P= price in $. The quantity supplied, QS, is given by QS=100+40P.
Which change will occur if the price rises from $ 5 to $ 6 ?
The market will move from equilibrium to shortage.
The market will move from equilibrium to surplus.
The market will move from shortage to surplus.
The market will move from surplus to shortage.
B
A company uses large amounts of gas to produce steel. Supplies of gas are reduced at the same time as the market for steel is hit by a recession.
What can be said about the likely changes in the market for steel?
equilibrium
price
equilibrium
quantity
falls
uncertain
rises
uncertain
uncertain
falls
uncertain
rises
C
Good P and good Q are substitutes. There is a decrease in supply of good P because of a shortage of materials.
Which row describes what will happen to demand?
good P
good Q
contraction
extension
contraction
shift to right
shift to left
shift to left
shift to left
shift to right
B