Question

The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $22, $12, $8, $4, and $2 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $8, $12, $22, $30, and $38 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied.

Price Quantity Demanded Quantity Supplied
($ per widget) (widgets) (widgets)
$2
$4
$8
$12
$20
$32
$44

In this market, the equilibrium price will beper widget, and the equilibrium quantity will be:________

Answer 1

The equilibrium price per widget is $2, and the equilibrium quantity is 12 widgets.

Step-by-step explanation:

To find the equilibrium price and quantity, we need to compare the prices at which the quantity demanded is equal to the quantity supplied.

At a price of $2, the quantity demanded is 12 (from the buyer's perspective), and the quantity supplied is also 12 (from the seller's perspective).

Therefore, the equilibrium price per widget is $2, and the equilibrium quantity is 12 widgets.

Answer 2

Price Quantity Supplied Quantity Demanded

$2 1 1

$4 2 1

$8 3 1

$12 4 2

$20 4 2

$32 5 4

$44 5 5

In this market, the equilibrium price will beper widget, and the equilibrium quantity will be:

In this market, the equilibrium price will be $44, because is the price where the quantity supplied and the quantity demanded is the same: 5 widgets supplied, and 5 widgets demanded.