Macroeconomics

‭In‬ ‭the‬ ‭following‬ ‭schedule‬ ‭for‬ ‭example,‬ ‭equilibrium‬ ‭occurs‬ ‭at‬ ‭a‬ ‭price‬ ‭of‬‭$140‬‭where‬‭both‬‭the‬‭quantity‬ ‭demanded‬ ‭and‬ ‭quantity‬ ‭supplied‬ ‭are‬ ‭equal‬ ‭to‬ ‭400‬ ‭units.‬ ‭At‬‭this‬‭price‬‭level,‬‭the‬‭market‬‭“clears”‬‭since‬ ‭producers are supplying what consumers demand.‬

‭Table 4: Market Equilibrium‬ ‭Price of a Tablet ($)‬

‭Quantity of Tablets Demanded‬

‭Quantity of Tablets Supplied‬

‭80‬

‭700‬

‭100‬

‭100‬

‭600‬

‭200‬

‭120‬

‭500‬

‭300‬

‭140‬

‭400‬

‭400‬

‭160‬

‭300‬

‭500‬

‭180‬

‭200‬

‭600‬

‭200‬

‭100‬

‭700‬

‭This‬‭equilibrium‬‭is‬‭represented‬‭graphically‬‭by‬‭plotting‬‭the‬‭demand‬‭(D)‬‭and‬‭supply‬‭(S)‬‭curves‬‭on‬‭the‬‭same‬ ‭diagram.‬ ‭The‬ ‭intersection‬ ‭point‬ ‭between‬ ‭the‬ ‭two‬ ‭curves‬ ‭represents‬ ‭the‬ ‭equilibrium‬ ‭price‬ ‭and‬ ‭quantity‬ ‭(point X below).‬

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