Scenario 4-1 Suppose the Demand Schedule in a Market Can Be Represented

question 106

Short Answer

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation Q^D = 500 - 10P, where Q^D is the quantity demanded and P is the price. Also, suppose the supply schedule can be represented by the equation Q^S = 200 + 10P, where Q^S is the quantity supplied.
-Refer to Scenario 4-1. Suppose the price is currently equal to 18 in this market. Is there a shortage or surplus in this market, and how large is the shortage/surplus?

---

Definitions:

Cost of Goods Available

The total cost of a company's inventory that is available for sale during a certain period.

Net Purchases

The total purchases minus returns, allowances, and discounts.

Beginning Inventory

The financial value of stock prepared for transaction at the start of a bookkeeping period.

Worksheet

An informal document used within an accounting system to collate all data for financial statements preparation, aiding in the adjustment and closing process.