2.6 UNIT LESSON 3 5 ACTIVITY 14 Equilibrium Price and Equilibrium Quantity Figure 14.1 below shows the demand for Greebes and the supply of Greebes. Plot these data on the axes in Figure 14.2. Label the demand curve D and label the supply curve S. Then answer the questions that follow. Fill in the answer blanks, or underline the correct answer in parentheses. Figure 14.1 Demand for and Supply of Greebes Price Quantity Demanded Quantity Supplied ($ per Greebe) (millions of Greebes millions of Greebes $.15 300 100 .20 250 150 .25 200 200 .30 150 250 35 100 300 * Figure 14.2 Demand for and Supply of Greebes 55 50- H .45- .40- .35- .30 PRICE PER GREEBE .25 .20- . 15 - . 10 .05- 50 100 150 200 250 300 350 400 QUANTITY (millions of Greebes) 1. Under these conditions, competitive market forces would tend to establish an equilibrium price of per Greebe and an equilibrium quantity of million Greebes. 2. If the price currently prevailing in the market is $0.30 per Greebe, buyers would want to buy million Greebes and sellers would want to sell million Greebes. Under these conditions, there would be a (shortage / surplus) of. million Greebes. Competitive market forces would tend to cause the price to (increase / decrease) to a price of per Greebe. At this new price, buyers would now want to buy . million Greebes, and sellers now want to sell million Greebes. Because of this change in (price / underlying conditions), the ed from Phillip Saunders, Introduction to Microeconomics: Student Workbook, 18th ed. (Bloomington, Ind., 1998). Copyright @ 1998 Phillip Saunders. All rights reserved. entranced.Placement Economics Microeconomics: Student Activities @ National Council on Economic Education, New York, N.Y. 71