Critical thinking 7 a producer makes 100 units of

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Unformatted text preview: does quantity demanded equal? 6. If supply decreases by more than demand decreases, what happens to equilibrium price? Critical Thinking 7. A producer makes 100 units of good X at $40 each. Under no circumstances will he sell the good for less than $40. Do you agree or disagree? Explain your answer. Graphing Economics 8. Graph the following: a. Demand increases in a market. b. Supply decreases in a market. c. Demand decreases in a market. d. Demand increases by more than supply increases in a market. Section 1 Supply and Demand Together 139 06 (128-153) EMC Chap 06 11/21/05 3:13 PM Page 140 Focus Questions Supply and Demand in Everyday Life Why the Long Lines for Concert Tickets? Suppose tickets for a rock concert go on sale at 8 a.m. on Saturday. A long line of people forms even before the ticket booth opens. The average person has to wait an hour to buy a ticket. Some people don’t get to buy tickets at all because the concert sells out before they get to the ticket booth. Why do so many people wait in line to buy tickets to the rock concert, yet you don’t see a long line of people waiting to buy food at the grocery store or TVs at the electronics store? Also, why are some of the people waiting to buy tickets to the rock concert turned away, but no one who wants to buy bread is turned away at the grocery store, and no one who wants to buy a TV set is turned away at the electronics store? The market for the rock concert tickets (at least in this instance) must differ somehow, but how? In economic terms, when some people go away without being able to buy what they came to buy, it means that quantity demanded exceeds quantity supplied, resulting in a shortage in the market. 140 Chapter 6 Price: Supply and Demand Together Why do people wait in long lines to buy tickets for some rock concerts? Why does a house cost more in San Francisco than in Louisville, but a candy bar costs the same in both cities? Why does it cost more to go to the movies on Friday night than on Tuesday morning? What does traffic congestion have to...
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