Question: Using the new demand in Figure 3.7 as a guide, determine the size of the market surplus or shortage that would exist at a price

Using the "new demand" in Figure 3.7 as a guide, determine the size of the market surplus or shortage that would exist at a price of

(a) $40
(b) $20

$50 Demand shifts if Tastes change. Incomes change. Price/availability of other goods change. Expectations change. 45 Market supply 40 SHIFT of demand 35 E2 30 25 New demand 20 15 10 Initial demand 25 50 75 100 125 150 QUANTITY (hours per semester) PRICE OF TUTORING (per hour)

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