Supply and Demand
Imagine that the demand for hard-drives is as follows:
Price
Quantity Demanded
Quantity Supplied
200
100
40
210
95
50
220
90
60
230
85
70
240
80
80
250
75
90
260
70
100
270
65
110
a)
What is the equilibrium price and quantity in this market?
Price ($):
Quantity:
b)
In an attempt to increase the hard-disk space of the nation, the government places a price ceiling on hard drives of $210. Calculate the excess demand caused by such a scheme.
Excess demand is:
c)
The government decides to subsidize hard drive producers by $30 per HD so that the increased demand will be met. Calculate the cost to the government.
The cost is ($):