ECON 1311 Lecture : Note_Feb_10_2022_9_51_12_AM
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The table below shows the demand and supply schedules for rolls of film.
| Price | Quantity demanded | Quantity supplied |
| ($ per roll) | (rolls per week) | (rolls per week) |
| 2.00 | 3,000 | 1,000 |
| 3.00 | 2,500 | 1,500 |
| 4.00 | 2,000 | 2,000 |
| 5.00 | 1,500 | 2,500 |
| 6.00 | 1,000 | 3,000 |
a. Explain the concepts of demand, supply, and market equilibrium. What is the market equilibrium price for rolls of film? What is the equilibrium quantity?
b. If the price of film is $3 a roll, describe the situation in the film market. Is there shortage or surplus at this price? Explain how market equilibrium is restored.
c. A rise in income increases the quantity demanded by 1,000 rolls a week at each price. Draw a new table to account for this change in demand.
What will be the new equilibrium price? Which quantity will be traded? Explain how the film market adjusts to its new equilibrium.
d. The number of film production lines increases, and at the same time, people switch to digital cameras. How do these events influence demand and supply? Do they create a shortage or a surplus at the equilibrium price in part a? Describe how the price and quantity change.
The table below shows the demand and supply schedules for rolls of film.
| Price | Quantity demanded | Quantity supplied |
| ($ per roll) | (rolls per week) | (rolls per week) |
| 2.00 | 3,000 | 1,000 |
| 3.00 | 2,500 | 1,500 |
| 4.00 | 2,000 | 2,000 |
| 5.00 | 1,500 | 2,500 |
| 6.00 | 1,000 | 3,000 |
a. Explain the concepts of demand, supply, and market equilibrium. What is the market equilibrium price for rolls of film? What is the equilibrium quantity?
b. If the price of film is $3 a roll, describe the situation in the film market. Is there shortage or surplus at this price? Explain how market equilibrium is restored.
c. A rise in income increases the quantity demanded by 1,000 rolls a week at each price. Draw a new table to account for this change in demand.
What will be the new equilibrium price? Which quantity will be traded? Explain how the film market adjusts to its new equilibrium.
d. The number of film production lines increases, and at the same time, people switch to digital cameras. How do these events influence demand and supply? Do they create a shortage or a surplus at the equilibrium price in part a? Describe how the price and quantity change.