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(Solved): (Table: Equilibrium Price, Quantity) Refer to the table. If the supply curve for the product shift ...
(Table: Equilibrium Price, Quantity) Refer to the table. If the supply curve for the product shifted to the right such that 10 more units of the good are supplied at every price, what is the new equilibrium price? Assume there is a sudden increase in demand, if the market if a perfectly competative free market we expect the price to adjust because the market is experiencing a shortage. a new, lower equilibrium. a surplus. nothing.
Expert Answer
We can see from the table that the initial equilibrium price is $14, which occurs where the quantity demanded (Qd) and the quantity supplied (Qs) are equal, both at a quantity of 40. If the supply curve shifts to the right such that 10 more units of the good are supplied at every price, then the new supply schedule will be: