DEMAND/SUPPLY SCHEDULE 1 DEMAND/SUPPLY SCHEDULE 2

Price Qd Qs
Qd + 200

(At each price)

Qs + 200

(At each price)

$50 200 800
$45 300 700
$40 400 600
$35 500 500
$30 600 400
$25 700 300
$20 800 200
1. Please complete demand/supply schedule 2 i. e if Qd and Qs from schedule 1 are increased by 200 units.

2. Determine equilibrium Price & Quantity in Schedule 1

3. Determine equilibrium Price & Quantity in Schedule 2.

4. Assume a price floor of $45 in Schedule 1; what is the result?

Assume a price ceiling of $25 in Schedule 1; what is the result?

In both cases what is the implication for resource allocation?

5. Distinguish between a change in demand/supply and change in quantity demanded/supplied.

6. In Schedule 2 state four (4) reasons that would shift the demand curve.

7. What are five (5) reasons that would shift the supply curve?