4.4 Why does the demand curve slope downward? Why does the supply curve slope upward? Given the demand and supply schedules below:
|
Price (dollars per CD) |
Quantity Demanded (per day) |
Quantity Supplied (per day) |
|
5.00 |
300 |
100 |
|
6.00 |
250 |
150 |
|
7.00 |
200 |
200 |
|
8.00 |
150 |
250 |
|
9.00 |
100 |
300 |
What is the market equilibrium?
If the price of a CD is set at $6.00, describe the situation in the CD market.
A rise in the number of recording studios increases the quantity of CDs supplied by 75 a day at each price. People download more music from the Internet and the quantity demanded of CDs decreases by 25 a day at each price. With no change in incomes, what is the new equilibrium?
