Question

The demand and supply schedules for sunscreen at a small beach are shown below. Market for sunscreen price (dollars per bottle) quantity of sunscreen demanded (bottles) quantity of sunscreen supplied (bottles) $35 1,000 8,500 30 2,000 7,000 25 3,000 5,500 20 4,000 4,000 15 5,000 2,500 10 6,000 1,000 instructions: enter your answers as a whole number.

a. If the price is $15 per bottle, how many bottles of sunscreen are demanded and supplied

Answer 1

Answer: Qd= 5000 bottles

Qs=25000 bottles

P=$20

Q=4000 bottles

Step-by-step explanation:

a. If the price is $15 per bottle, how many bottles of sunscreen are demanded and supplied?

Qd = 5000 bottles correct.

Qs = 2500 bottles correct.

In this case, there would be UPWARD pressure on the price. Correct

b. What is the equilibrium price and quantity in the market for sunscreen?

P = $ 20 . correct.

Q = 4000 . bottles correct.

Answer 2

Answer: At $15, quantity demanded is 5,000 and quantity supplied is 2,500.

Explanation:

Equilibrium occurs at a point where quantity demanded for a good is equal to its quantity demanded.

As, can be seen from data, the quantity demanded = quantity supplied = 4,000 at $20.

At a price below this, that is at $15, demand for the good is greater than its supply.

At $15, quantity demanded is 5,000 and quantity supplied is 2,500.