Click on the link to download the problem set for this module: Supply and Demand Problem Set.

## Supply and Demand Problem Set^{[1]}

### Use the following graph to answer questions 1 through 3:

- Plot the following Price and Quantity combinations: (4, 8), (1, 2), (5, 10)
- Is your graph more likely to be a demand curve or a supply curve? Why?
- Using the equation of a line, and P for price and Q for quantity, what is the algebraic formula of this curve?

### Use the following graph to answer questions 4 and 5:

- Plot the following Price and Quantity combinations. Note that the points are given in the format (Quantity, Price).(0, 50), (2, 40), (4, 30), (6, 20), (8, 10)
- Using the equation of a line, what is the algebraic formula of this demand curve?

### Use the following information to answer questions 6 through 10:

Suppose the equation of the line changes to [latex]P=-5\times Q+70[/latex]. Compute the quantity demanded at each indicated price.

- Price: $50, Quantity:
- Price: $40, Quantity:
- Price: $30, Quantity:
- Price: $20, Quantity:
- Price: $10, Quantity:

### Use the following graph to answer questions 11 through 14:

- Let’s call the original demand curve (from Question 4) D1 and the new demand curve (from Questions 6-10) D2. Plot both of the demand curves on the graph above.

Use the formulas for the two demand curves to compute the quantity demanded shown by each curve at a price of $34.

- Demand Curve D1: Price: $34, Quantity:
- Demand Curve D2: Price: $34, Quantity:
- Describe what has happened to demand in this problem.

### Use the following information to answer questions 15 and 16:

Use the following two equations for the demand and supply curves to compute the equilibrium price value.

Demand curve: [latex]Q_d=3300-2P[/latex]

Supply curve: [latex]Q_s=500+8P[/latex]

- What is the value of the equilibrium price?
- What is the equilibrium quantity?

### Use the following information to answer questions 17 and 18:

Suppose Congress cuts personal income tax rates.

- Draw a simple supply and demand graph to show how this would affect the market for refrigerators.

- Why does this shift occur? How does that affect the equilibrium price and quantity? Explain.

### Use the following information to answer questions 19 and 20:

Suppose that scooter workers accept a pay cut of 2 dollars per hour.

- Draw a graph to show how this would affect the market for scooters.

- Why does this shift occur? How does that affect the equilibrium price and quantity? Explain.

[1] This assignment by Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License. You can access an alternative means to plotting points at https://www.desmos.com/calculator.