Answers:
- The equilibrium price is located at the intersection of the supply and demand curves.
- The equilibrium price is $8
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Explanation:
Visually, the two curves cross at (x,y) = (60,8) where x is the quantity and y is the price. This is known as the equilibrium.
In the third row of each table, we have the same pair of values $8 and 60 in that exact order. This leads to finding the equilibrium without using the graph.
Something like the first row wouldn't work because the first table shows $2 and 10, while the second table has that same row showing $12 and 10. There isn't a match.
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Extra info (optional section)
If the price is below equilibrium, then suppliers don't have much incentive to produce. This means they'll produce less. At the same time, demand will increase since price and quantity demanded go in opposite directions. Having more people demand for something that's in short supply is known as a shortage. Think of a bunch of people at a mall and there's a mad rush for one very rare item. If people really wanted that item, then they'll outbid each other to raise the price until it reaches some stable point. This idea is applied on a much larger scale.
If the price is above equilibrium, then suppliers will produce too much goods and demand will be lower. In this case, we have surplus and that will lower the cost of the goods eventually assuming there aren't external forces to keep the price afloat. The price will eventually drift down to equilibrium. An example could be that a store has too many coats and it's getting closer to the warmer spring weather, so they heavily discount the coats. Low demand on the large supply of coats lowers the price of those items.
As you can see, the equilibrium price is effectively a game of tug-of-war between the suppliers and consumers (those who demand and purchase a product). It's the middle ground, so to speak, between the two parties.
