EduNinja

Learn this topic

Study 2.3.2—Changes in equilibrium conceptsOpen the corresponding Concept lesson for explanations, examples and exam connections.

[Maximum number: 4]

Note that widgets and pidgets are imaginary products.

In the country of Burbia, the demand and supply of widgets are given by the functions

\begin{aligned} & Q d=249-4 P \\ & Q s=150+14 P \end{aligned}

where Qd is the quantity demanded per month, Qs is the quantity supplied per month and P is the price per widget in dollars ($).

(a)

Calculate the excess demand/excess supply (state which of these) at a price of $\$8.50$ .

[ 2 ]

$\mathrm{Qd}=249-4 \times 8.50=215$
Qs $=150+14 \times 8.50=269$

Any valid working is sufficient for [1].
There will be excess supply or a surplus of 54 .

An answer of 54 (without working) is sufficient for [1].

(b)

Calculate the price at which excess demand of 18 widgets would result.

A demand curve is drawn under the assumption of ceteris paribus.

[ 2 ]

249-4 P=150+14 P+18
81=18 P

Any valid working is sufficient for [1].
$P=\$4.50$

An answer of 4.50 (without working) is sufficient for [1].

All question bank results loaded

IB Economics HL 2.3.2 Changes in Equilibrium Topic Practice

Learn this topic

Question 1

Question (a)

Question (b)