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Unformatted text preview: Show your work in the space provided below. Answer: Equilibrium price = Equilibrium quantity = 3. At the equilibrium price, the quantity demanded is equal to the quantity supplied. At any other price (called a disequilibrium price) there is either a shortage or surplus. Calculate the amount of the shortage at a price of $5.30. Show your work below: Answer: Amount of shortage 4. Now assume that the demand curve shifts, ceteris paribus , such that D w : Q dw = 80 4*P w Plot this shifted demand curve on your graph and label it as D*. What may have cause the shift in the demand function? 5. Use simple algebra to find the equilibrium price and quantity after this demand shift. Show your work below: Answer: Equilibrium price = Equilibrium quantity =...
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This note was uploaded on 02/10/2011 for the course AEB 3103 taught by Professor Cazanova during the Fall '08 term at University of Florida.
- Fall '08