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When the price is at $42 per keyboard, there is a surplus in the market. At $42, there is a surplus of 300 units of keyboards in the market. The pressure is downward. When demand is low, there is a pressure for the prices to be reduced.
<h3>What is the market situation at $18?</h3>At $18, there is a shortage of 200 keyboards. The pressure is upwards. Basic demand and supply indicates that when the demand is above the equilibrium point, the pressure for price to increase is high.
It is to be noted that the equilibrium point is the basis for the above rationalization. The equilibrium point is the price-point at which demand equals supply.
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Full Question:
The following graph shows the monthly demand and supply curves in the market for keyboards.
A) Use the graph input tool to help you answer the following questions. Enter an amount into the Price field to see the quantity demanded and quantity supplied at that price.
B) The equilibrium price in this market is ________ per keyboard, and the equilibrium quantity is ____________ keyboards bought and sold per month.
Complete the following table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and whether this places upward or downward pressure on prices.
Also see the attached image.
