Answer:
a. $11.49
b. Excess demand (shortage)
c. 1000
d. 250
e. Excess supply (surplus)
Step-by-step explanation:
Part a
The equilibrium price refers to the point where the supply curve and demand curve intersect. At this intersection point, the quantity of game controllers that suppliers are willing to provide matches the quantity that consumers are willing to purchase. This represents a market equilibrium where supply equals demand.
Therefore, the equilibrium price is $11.49.
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Part b
At a price of $7.99, the quantity demanded far exceeds the quantity supplied, as indicated by the demand curve being higher than the supply curve at this price point. This creates a situation of excess demand, also known as a shortage.
In other words, when the price is set at $7.99, there are more consumers demanding game controllers than there are controllers available in the market. This suggests that the price might be set too low.
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Part c
From observation of the given graph, the number of game controllers that are demanded at a price of $7.99 is 1,000.
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Part d
From observation of the given graph, the number of game controllers that are supplied at a price of $7.99 is 250.
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Part e
According to the graph, when the price is set at $12.99, the supply curve is higher than the demand curve. This indicates that the quantity supplied exceeds the quantity demanded, and creates a situation of excess supply, also known as a surplus.
In other words, at the price of $12.99, there is an excess of game controllers available in the market compared to the quantity demanded by consumers. This suggests that the price might be set too high.
