Blake Normine
New member
The accompanying table gives the annual U.S. demand and supply schedules for pickup trucks.
Price of Toyotas / Quantity demanded / Quantity supplied
$20,000 / 20 / 14
$25,000 / 18 / 15
$30,000 / 16 / 16
$35,000 / 14 / 17
$40,000 / 12 / 18
a. Plot the demand and supply curves using these schedules. Indicate the equilibrium price and quantity on your graph.
b. Suppose the accelerator used on Toyotas are found to be defective. What would you expect to happen in the market for Toyotas? Show this on the graph.
c. Suppose that the US Department of Transportation imposes costly regulations on manufacturers that cause them to reduce supply. Show this on the graph.
Price of Toyotas / Quantity demanded / Quantity supplied
$20,000 / 20 / 14
$25,000 / 18 / 15
$30,000 / 16 / 16
$35,000 / 14 / 17
$40,000 / 12 / 18
a. Plot the demand and supply curves using these schedules. Indicate the equilibrium price and quantity on your graph.
b. Suppose the accelerator used on Toyotas are found to be defective. What would you expect to happen in the market for Toyotas? Show this on the graph.
c. Suppose that the US Department of Transportation imposes costly regulations on manufacturers that cause them to reduce supply. Show this on the graph.