below are demand and supply schedules for smartphones. on the graph paper provided plot the points on the…

below are demand and supply schedules for smartphones. on the graph paper provided plot the points on the schedule to create your curves. after creating both curves, answer the questions below.\ndemand schedule\nprice quantity\n1.10 100\n1.30 90\n1.80 80\n2.00 75\n2.40 65\n2.70 60\n3.10 50\n3.60 30\nsupply schedule\nprice quantity\n3.60 105\n3.20 100\n2.80 98\n2.40 80\n2.00 70\n1.80 60\n1.30 45\n1.00 30\nanswer the following questions:\nwhat is equilibrium quantity?\nwhat is the equilibrium price?\nif producers decided to decrease their price to $1.80 per unit, what would the result on the market be?\nwhat would be the effect on the demand curve be if personal income increased nationwide?\nwhat would be the effect on the demand curve if the price of a smartphone substitute dropped?

below are demand and supply schedules for smartphones. on the graph paper provided plot the points on the schedule to create your curves. after creating both curves, answer the questions below.\ndemand schedule\nprice quantity\n1.10 100\n1.30 90\n1.80 80\n2.00 75\n2.40 65\n2.70 60\n3.10 50\n3.60 30\nsupply schedule\nprice quantity\n3.60 105\n3.20 100\n2.80 98\n2.40 80\n2.00 70\n1.80 60\n1.30 45\n1.00 30\nanswer the following questions:\nwhat is equilibrium quantity?\nwhat is the equilibrium price?\nif producers decided to decrease their price to $1.80 per unit, what would the result on the market be?\nwhat would be the effect on the demand curve be if personal income increased nationwide?\nwhat would be the effect on the demand curve if the price of a smartphone substitute dropped?

Answer

Explanation:

Step1: Find equilibrium

Equilibrium occurs where quantity demanded equals quantity supplied. Looking at the schedules, when price is $2.00, quantity demanded is 75 and quantity supplied is 70. When price is $2.40, quantity demanded is 65 and quantity supplied is 60. As we check the values, we see that at a price of $2.00, the closest match for equilibrium exists with quantity around 70 - 75. Let's assume a linear - like relationship between the points. By observing, we can say equilibrium quantity is 70 and equilibrium price is $2.00.

Step2: Analyze price decrease to $1.80

At a price of $1.80, quantity demanded is 80 and quantity supplied is 45. So there is a shortage since quantity demanded is greater than quantity supplied.

Step3: Analyze income increase

If personal income increased nationwide, for a normal good like smartphones, the demand curve would shift to the right as consumers have more purchasing power and will demand more at each price level.

Step4: Analyze substitute price drop

If the price of a smartphone substitute dropped, consumers would switch to the substitute. So the demand for smartphones would decrease and the demand curve would shift to the left.

Answer:

  • What is equilibrium quantity? 70
  • What is the equilibrium price? $2.00
  • If producers decided to decrease their price to $1.80 per unit, what would the result on the market be? Shortage
  • What would be the effect on the demand curve be if personal income increased nationwide? Demand curve shifts to the right
  • What would be the effect on the demand curve if the price of a smartphone substitute dropped? Demand curve shifts to the left