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Unformatted text preview: 05 3:14 PM Page 146 we can say that the quantity supplied of tight
end positions is three. Suppose that 30 people want to try out for the position of tight
end. The quantity demanded of tight end
positions is then 30. Because quantity
demanded is greater than quantity supplied,
a shortage of tight end positions results.
When a shortage of anything occurs in a
competitive market, the price of that thing
rises. The team’s coach, of course, is not
going to accept money from the students
who want to try out for the team. What he
will do is raise the “price” of being a tight
end in a different way. People will have to
“pay” to be a tight end with hard work and
skill. The players who pay more—demonstrate more skill and work harder—will be
the ones to make the team as tight ends.
Would these players have to be as good to
get on the team if only five people wanted to
be a tight end? Not at all. In that case, the
shortage of tight end positions would be
smaller, and the “price” of being a tight end
would not rise as much to bring supply and
demand into equilibrium. Supply and Demand on
the College Campus
As you probably know, you do not need
the same grade point average (GPA) or standardized test score (SAT or ACT) to get into
all colleges. One college may require a GPA of
3.0 and an SAT score of 1550, while another
requires a GPA of 3.8 and an SAT score of
2100.2 Why the difference? Again, the answer
is supply and demand. The higher the
demand to get into a particular college, the
higher its entrance requirements.
Take two colleges, college A and college B.
Each college will admit 2,000 students to its
entering freshman class next year. Each college charges $5,000 a semester in tuition.
The quantity supplied of open spots and the
tuition are the same at each college, but suppose the demand to go to college A is three
times the demand to go to college B. At college B, 4,000 students apply for 2,000 spots,
but 12,000 students apply for 2,000 spots at
2 The new SAT scores used here first went into effect in March
of 2005. 146 Chapter 6 Price: Supply and Demand Together The shortage at college A is greater tha...
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This document was uploaded on 01/16/2014.
- Winter '14