Question

The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $20, $12, $8, $4, and $2 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $8, $12, $20, $32, and $44 (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______widgets.

Answer 1

4

Step-by-step explanation:

The completion of the table is shown below;

Price Quantity Demanded Quantity Supplied

($ per widget) (widgets) (widgets)

$2 5 1

$4 5 2

$8 5 3

$12 4 4

$20 3 5

$32 2 5

$44 1 5

As we can see that at the price of $12 the quantity demanded is equivalent to the quantity supplied i.e 4 so here the equilibrium quantity is 4 for the widgets