1. Suppose the market for the Toyota Prius in a certain area has the following demand...

 

Transcribed Image Text:

1. Suppose the market for the Toyota Prius in a certain area has the following demand and supply curves: Qp = 500-4P Qs = 6P where price is for a single Prius (in thousands of dollars) and quantity is in thousands of cars sold. a. Use graph paper to determine the equilibrium price and quantity of Priuses in this market. (Use the graph paper on Canvas. To plot the graphs, use reasonable values of p, calculate Q, and Qs, and plot the points on the graph paper. If you have problems plotting graphs, set up office hours, though it might be easier to google it.) b. Is there a surplus or shortage in this market if the price is initially $20 thousand? Explain how market forces would move from this price to the equilibrium price and quantity. Sketch a supply and demand curve and the iterative process below to illustrate your answer. 1. Suppose the market for the Toyota Prius in a certain area has the following demand and supply curves: Qp = 500-4P Qs = 6P where price is for a single Prius (in thousands of dollars) and quantity is in thousands of cars sold. a. Use graph paper to determine the equilibrium price and quantity of Priuses in this market. (Use the graph paper on Canvas. To plot the graphs, use reasonable values of p, calculate Q, and Qs, and plot the points on the graph paper. If you have problems plotting graphs, set up office hours, though it might be easier to google it.) b. Is there a surplus or shortage in this market if the price is initially $20 thousand? Explain how market forces would move from this price to the equilibrium price and quantity. Sketch a supply and demand curve and the iterative process below to illustrate your answer.

Answer rating: 100% (QA)

a Graphing the Supply and Demand curves Graph uploaded showing supply and dem... View the full answer