# Demand, Supply, and Market Equilibrium

Patience required, no kidding. This file contains four pages.

Given is a demand schedule of a hypothetical buyer in a hypothetical market:

Price (P) Quantity Demanded (Qd)
\$1 500 units
\$2 400 units
\$3 300 units
\$4 200 units
\$5 100 units

Draw the demand curve. Let P be on the vertical axis and Qd on the horizontal axis. Your axes must show the correct labels as instructed. The title of your graph is Demand Curve. Use Excel to construct your graph. No other software is accepted. You will want to copy the resulting graph on your Excel file, then paste it on this Word document.
Hint: Use the graphing tutorial I added in this Module for Chapter 4. If that does not work for you, search for other tutorials online, or seek assistance from our university’s tutoring center. Please plan your visit long before the deadline.

Given is a hypothetical supply schedule of a seller in a hypothetical market:

Price (P) Quantity Supplied (Qs)
\$1 100 units
\$2 200 units
\$3 300 units
\$4 400 units
\$5 500 units

Draw the supply curve. Let P be on the vertical axis and Qs on the horizontal axis. Your axes must show the correct labels as instructed. The title of your graph is Supply Curve. Use Excel to construct your graph. No other software is accepted. You will want to copy the resulting graph on your Excel file, then paste it on this Word document.
Hint: Use the graphing tutorial I added in this Module for Chapter 4. If that does not work for you, search for other tutorials online, or seek assistance from our university’s tutoring center. Please plan your visit long before the deadline.

We now combine the hypothetical demand and supply schedules given above.

Price Qd Qs
\$1 500 100
\$2 400 200
\$3 300 300
\$4 200 400
\$5 100 500

a. Construct the demand and supply curves on one graph. Let P be on the vertical axis and Q (quantity) be on the horizontal axis. Those labels must show on your graph. The title of your graph is Market Equilibrium.
Hint: This one may be more challenging because the axes are more likely to come out in reverse, meaning, your quantity will be along the vertical axis and your price along your horizontal, and that will not be acceptable. So, how do you reverse them to where P is on the vertical and Q on the horizontal? There will be a few steps to do, so patience is required. I found these two videos on YouTube, and I hope one of them will work for you. When all else fail, then seek help from our tutoring center. Please plan your visit long before the deadline.
Changing X and Y Axes in Excel 2007: https://www.youtube.com/watch?v=7zPxWgBaQUI
Changing X and Y Axes in Excel 2013/16: https://www.youtube.com/watch?v=3LCqQH2o4ZY

After you have constructed your equilibrium graph, proceed by answering the following questions:

b. How much is the equilibrium price (Pe)?

c. What is the value of the equilibrium quantity (Qe)?

d. Refer to the hypothetical chart or graph combining the demand and supply data. If the selling price in the market is \$5, what economic problem occurs and by how many units? The problem is either a shortage or a surplus, then you must calculate the shortage or surplus units. Show your calculation.

e. Refer to the hypothetical chart or graph combining the demand and supply data. If the selling price in the market is \$2, what economic problem occurs by how many units? The problem is either a shortage or a surplus, then you must calculate the shortage or surplus units. Show your calculation.

When you are done, review your work one more time before submitting. Breath and give yourself a pat on the back 

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