Question

Assume the equilibrium price in a free market for an office table is R320,00 and equilibrium quantity is 1000. Using the supply and demand framework, draw a graph illustrating the above scenario and explain how explain the market for this piece of furniture moves from disequilibrium to equilibrium if the price of the table moves up to R400,00. (15) 3.2 The government wishes to make its population pursue a healthier lifestyle. A nationwide campaign to educate people about the benefits of eating healthy is launched, and people are encouraged to consume vegetables at every meal. Explain the impact of this educational programme on the price and quantity for the vegetables. Motivate your answer with a diagram. Answer must include introduction , recommendation and conclusion

Answer 1

The equilibrium price of an office table is R320,00 with an equilibrium quantity of 1000. If the price of the table moves up to R400,00, it will lead to a surplus in the market until a new equilibrium is reached at a lower quantity and a higher price. The government's program to encourage people to consume vegetables at every meal will increase the demand and lead to a higher price and quantity of vegetables.

Step-by-step explanation:

The equilibrium price of an office table is R320,00 with an equilibrium quantity of 1000. To illustrate this scenario using the supply and demand framework, you can create a graph with price on the y-axis and quantity on the x-axis. Plot a supply curve that slopes upward from left to right, representing the quantity of tables suppliers are willing to sell at different prices. Plot a demand curve that slopes downward from left to right, representing the quantity of tables buyers are willing to purchase at different prices. The point where the supply and demand curves intersect is the equilibrium point. If the price of the table moves up to R400,00, it will lead to a surplus in the market as the quantity supplied will exceed the quantity demanded. This will put downward pressure on the price until a new equilibrium is reached at a lower quantity and a higher price.

The government's educational program to promote a healthier lifestyle and encourage people to consume vegetables at every meal will have an impact on the price and quantity of vegetables. The increased demand for vegetables will lead to a shift in the demand curve to the right, resulting in a higher equilibrium price and quantity. Using a graph, you can show the initial demand curve and the new demand curve that represents the increase in demand. The new equilibrium point will have a higher price and quantity of vegetables. Overall, the government's program is likely to increase the price and quantity of vegetables by creating a higher demand in the market.