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Surplus, Shortage, Equilibrium Worksheet

The document presents a formative assessment on the concepts of supply and demand using CD pricing scenarios. It includes various demand and supply schedules, questions regarding equilibrium price, surplus, and shortage, as well as changes in demand and supply due to external factors. The assessment encourages analysis of how shifts in demand and supply curves affect market equilibrium and pricing.

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Preeti Sinha
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106 views

Surplus, Shortage, Equilibrium Worksheet

The document presents a formative assessment on the concepts of supply and demand using CD pricing scenarios. It includes various demand and supply schedules, questions regarding equilibrium price, surplus, and shortage, as well as changes in demand and supply due to external factors. The assessment encourages analysis of how shifts in demand and supply curves affect market equilibrium and pricing.

Uploaded by

Preeti Sinha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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FORMATIVE ASSESSMENT

Combining Supply and Demand


Scenario: The following shows a demand and supply schedule listing CDs demanded and supplied (in the millions) per
week at each price.

 Graph each the following demand/supply schedules on one demand graph and then answer the questions
below:
$6.00

5.00
Price Per Quantity Quantity Shortage/
Compact Demanded Supplied Surplus
4.00
Disc (QS – QD)

$6 0 9 3.00

5 2 6

4 3 5 2.00

0
3 4 4

2 6 3 1.00

1 9 0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
a. What is the equilibrium price? ______________
b. What is the QD and QS at the equilibrium price?_______________

c. What is the surplus at $6? ______________

d. What is the shortage at $2 ______________

e. How does a surplus affect the price of a product? ____________________________________________


f. How does a shortage affect the price of a product? ___________________________________________

Changes in Demand
Scenario: The following schedule shows a change in demand based on the price of a related product. The demand
increased for CDs because the price of CD players dropped.

Price Per Quantity Quantity Quantity Shortage $6.00


Compact Demanded Demanded Supplied or
Disc (CD (CD Surplus
(QS - 5.00
Players Players
new QD)
$75) $50)
4.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
$6 0 4 9

3.00
5 2 6 6

4 3 7 5 2.00

3 4 8 4

1.00
2 6 11 3

1 9 13 0

a. What happened to the original demand curve? ______________________________________________


b. How was the equilibrium point affected? ___________________________________________________
c. What is the surplus at $6.00? _________________
d. What is the shortage at $2.00? _________________
e. How did this scenario benefit the supplier of CDs? ____________________________________________

Changes in Supply
Scenario: The following schedule shows a change in supply based on new technology and methods of producing CDs.
The supply increased for CDs because the new technology allowed the supplier to produce CDs at a reduced rate.

Price Per Quantity Quantity Quantity Shortage/ $6.00


Compact Demanded Supplied Supplied Surplus
Disc (old (new (New QS
technology) technology) minus 5.00
QD)

4.00
$6 0 9 14

3.00
5 2 6 12

2.00
4 3 5 10

3 4 4 8 1.00

2 6 3 6
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1 9 0 3

a. What happened to the original supply curve? ___________________________________________________


b. How was the equilibrium point affected? ______________________________________________________
c. What is the surplus at $6.00? ___________
d. Why is there no longer a shortage at $2.00? ____________________________________________________
e. How did this scenario benefit the consumers of CDs? _____________________________________________
Changes in Supply and Demand
Scenario: The following schedule shows a change in supply and demand simultaneously for CDs.

Price Per Quantity Quantity Quantity Quantity $6.00


Compact Demanded Demanded Supplied Supplied
Disc (CD (CD (old (new
Players Players technology) technology) 5.00
$75) $50)

4.00
$6 0 4 9 14
3.00
5 2 6 6 12
2.00
4 3 7 5 10

1.00
3 4 8 4 8

2 6 11 3 6 0

1 9 13 0 3

a. How was the equilibrium point affected?


__________________________________________
b. What would happen to the price of CD’s if an
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
alternative product, such as the iPod, became popular
and shifted the demand curve back to D1? (all things remaining the same)________________________________
c. What would happen to the price of CD’s if an input for creating cd increased and shifted the supply curve back to
S1? (all things remaining the same) _____________________________________________________

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