Examine the supply and demand schedules for laptops. How much would a seller charge if he or she wanted to sell laptops for their equilibrium price?
| Price of laptops | Quantity supplied |
|-------------------|-------------------|
| $300 | 100 |
| $400 | 300 |
| $500 | 500 |
| $600 | 700 |
| $700 | 900 |
| Price of laptops | Quantity demanded |
|-------------------|-------------------|
| $300 | 450 |
| $400 | 300 |
| $500 | 200 |
| $600 | 150 |
| $700 | 125 |
A. $700
B. $500
C. $300
D. $400
Answer (2)
The problem provides supply and demand schedules for laptops.
The equilibrium price is where quantity supplied equals quantity demanded.
Comparing the schedules, at $400, both quantity supplied and quantity demanded are 300.
Therefore, the equilibrium price is $400 .
Explanation
Understanding the Problem We are given supply and demand schedules for laptops and asked to find the equilibrium price. The equilibrium price is the price at which the quantity supplied equals the quantity demanded.
Finding the Equilibrium Price We need to compare the quantity supplied and quantity demanded at each price point to find where they are equal.
Comparing Supply and Demand At a price of $300, the quantity supplied is 100 and the quantity demanded is 450. These are not equal. At a price of $400, the quantity supplied is 300 and the quantity demanded is 300. These are equal. At a price of $500, the quantity supplied is 500 and the quantity demanded is 200. These are not equal. At a price of $600, the quantity supplied is 700 and the quantity demanded is 150. These are not equal. At a price of $700, the quantity supplied is 900 and the quantity demanded is 125. These are not equal.
Determining the Answer The equilibrium price is $400 because at this price, the quantity supplied (300) is equal to the quantity demanded (300).
Examples
Understanding supply and demand is crucial in economics. For example, if you're selling lemonade, knowing how much people want (demand) at different prices and how much you can make (supply) helps you set the best price to sell all your lemonade without having any left over or missing out on potential sales. This concept applies to many real-world scenarios, from pricing products in a store to understanding stock market fluctuations.
The equilibrium price for laptops, where the quantity supplied equals the quantity demanded, is $400. This is determined by comparing the supply and demand schedules. Therefore, the answer is option D: $400.
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