Dominick Salvatore Schaums Outline of Microeconomics, 4th edition Schaums Outline Series 2006

10 INTRODUCTION [CHAP. 1
Table 1.2
Price ($) 0 1 2 3 4 5 6
Quantity Supplied
(per unit of time)
0 1000 2000 3000 4000 5000 6000
(b)
By plotting each pair of price-quantity values in Table 1.2 as a point on a graph and joining the resulting
points, we get the corresponding market supply curve for this commodity shown in Fig. 1-3.
Fig. 1-3
(A more detailed discussion of supply functions, supply schedules, and supply curves is presented in Sections 2.2
to 2.8.)
1.15 (a) On one set of axes, redraw the market demand curve of Problem 1.13 and the market supply curve
of Problem 1.14. (b) At what point are demand and supply in equilibrium? Why? (c) Starting from a
position at which this market is not in equilibrium, indicate how equilibrium is reached.
(a)
Fig. 1-4
(b)
Demand and supply are in equilibrium when the market demand curve intersects the market supply curve for
the commodity. Thus, at the price of $3, the quantity demanded of this commodity in the market is 3000 units
per time period. This equals the quantity supplied at the price of $3. As a result, there is no tendency for the
price and the quantity bought and sold of this commodity to change. The price of $3 and the quantity of 3000
units represent, respectively, the equilibrium price and the equilibrium quantity of this commodity.