Microeconomics worksheet analyzing supply and demand changes for CDs due to shifts in related product prices and technological advancements in production.
A microeconomics worksheet titled "Supply and Demand Worksheet 2301" from Summer 2017, featuring two scenarios. The first scenario shows a change in demand for CDs due to a decrease in the price of a related product, with a table listing price per compact disc, quantity demanded by old and new CD players, quantity supplied, and shortage/surplus. A graph plots price against quantity. The second scenario illustrates a change in supply due to new technology reducing production costs, with a similar table and graph. Questions ask about shifts in demand and supply curves, equilibrium points, surplu
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Step-by-step solution for: Solved Supply and Demand Worksheet Microeconomics 2302 | Chegg.com
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Show Answer Key & Explanations
Step-by-step solution for: Solved Supply and Demand Worksheet Microeconomics 2302 | Chegg.com
Let's solve each part of this Supply and Demand Worksheet step by step, based on the two scenarios provided: Changes in Demand and Changes in Supply.
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## 🔹 Part 1: Changes in Demand
The demand for CDs increased because the price of CD players decreased. This is a change in demand, not a change in quantity demanded (which would be due to price changes). A decrease in the price of a complementary good (CD player) increases demand for CDs.
We are given:
| Price per Compact Disc | Quantity Demanded (Old CD Players $75) | Quantity Demanded (CD Players $50) | Quantity Supplied | Shortage or Surplus (New QD minus QS) |
|------------------------|----------------------------------------|--------------------------------------|--------------------|---------------------------------------|
| $6 | 0 | 4 | 9 | ? |
| $5 | 2 | 6 | 6 | ? |
| $4 | 3 | 7 | 5 | ? |
| $3 | 4 | 8 | 4 | ? |
| $2 | 6 | 11 | 3 | ? |
| $1 | 9 | 13 | 0 | ? |
> Note: The new demand column reflects higher quantities demanded at each price due to lower CD player prices.
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✔ Answer:
The demand curve shifted to the right.
Because the price of a complementary good (CD player) decreased, consumers want more CDs at every price level → increase in demand.
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To find the effect, we need to determine the original equilibrium and new equilibrium.
#### Step 1: Find original equilibrium (old demand vs supply)
Original demand (CD players at $75):
- At $4: QD = 3, QS = 5 → surplus
- At $3: QD = 4, QS = 4 → equilibrium!
→ So, original equilibrium price = $3, quantity = 4
#### Step 2: Find new equilibrium (new demand vs supply)
New demand (CD players at $50):
| P | New QD | QS | Shortage/Surplus |
|---|--------|----|------------------|
| 6 | 4 | 9 | 4 - 9 = -5 → Surplus of 5 |
| 5 | 6 | 6 | 6 - 6 = 0 → Equilibrium! |
| 4 | 7 | 5 | 7 - 5 = +2 → Shortage of 2 |
| 3 | 8 | 4 | 8 - 4 = +4 → Shortage of 4 |
| 2 | 11 | 3 | 11 - 3 = +8 → Shortage of 8 |
| 1 | 13 | 0 | 13 - 0 = +13 → Shortage of 13 |
So, new equilibrium is at $5, where QD = QS = 6.
✔ Answer:
The equilibrium price increased from $3 to $5, and quantity increased from 4 to 6.
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At $6:
- New QD = 4
- QS = 9
- Surplus = QS - QD = 9 - 4 = 5
✔ Answer: Surplus of 5
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At $2:
- New QD = 11
- QS = 3
- Shortage = QD - QS = 11 - 3 = 8
✔ Answer: Shortage of 8
---
✔ Answer:
Suppliers benefited because:
- The equilibrium price rose from $3 to $5, so they can sell CDs at a higher price.
- The equilibrium quantity increased from 4 to 6, so they sell more units.
- Therefore, total revenue increases (higher price × higher quantity).
- Also, shortages at lower prices indicate strong demand, which gives suppliers market power.
---
## 🔹 Part 2: Changes in Supply
New technology allows producers to make CDs at a reduced rate → supply increases.
We are given:
| Price per Compact Disc | Quantity Demanded | Quantity Supplied (old tech) | Quantity Supplied (new tech) | Shortage or Surplus (New QS minus QD) |
|------------------------|-------------------|-------------------------------|------------------------------|---------------------------------------|
| $6 | 0 | 9 | 14 | ? |
| $5 | 2 | 6 | 12 | ? |
| $4 | 3 | 5 | 10 | ? |
| $3 | 4 | 4 | 8 | ? |
| $2 | 6 | 3 | 6 | ? |
| $1 | 9 | 0 | 3 | ? |
---
✔ Answer:
The supply curve shifted to the right.
Because of new technology, producers can supply more CDs at each price, so supply increases.
---
Now let’s compute shortage/surplus for each price using:
> Shortage/Surplus = New QS - QD
If positive → surplus
If negative → shortage
| P | QD | New QS | Surplus/Shortage |
|---|----|--------|------------------|
| 6 | 0 | 14 | 14 - 0 = +14 → Surplus |
| 5 | 2 | 12 | 12 - 2 = +10 → Surplus |
| 4 | 3 | 10 | 10 - 3 = +7 → Surplus |
| 3 | 4 | 8 | 8 - 4 = +4 → Surplus |
| 2 | 6 | 6 | 6 - 6 = 0 → Equilibrium |
| 1 | 9 | 3 | 3 - 9 = -6 → Shortage |
So, new equilibrium is at $2, where QD = QS = 6.
Compare with original equilibrium:
- Original: at $3, QD=4, QS=4 → equilibrium at $3
- New: at $2, QD=6, QS=6 → equilibrium at $2
✔ So, equilibrium price fell from $3 to $2, and quantity increased from 4 to 6.
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## ✔ Final Answers Summary:
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a. The original demand curve shifted to the right.
b. The equilibrium price increased from $3 to $5, and quantity increased from 4 to 6.
c. Surplus at $6.00 = 5
d. Shortage at $2.00 = 8
e. Suppliers benefited from higher prices and increased sales volume, leading to higher total revenue.
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a. The original supply curve shifted to the right due to improved technology.
---
Let me know if you'd like me to graph these changes as well!
---
## 🔹 Part 1: Changes in Demand
Scenario:
The demand for CDs increased because the price of CD players decreased. This is a change in demand, not a change in quantity demanded (which would be due to price changes). A decrease in the price of a complementary good (CD player) increases demand for CDs.
We are given:
| Price per Compact Disc | Quantity Demanded (Old CD Players $75) | Quantity Demanded (CD Players $50) | Quantity Supplied | Shortage or Surplus (New QD minus QS) |
|------------------------|----------------------------------------|--------------------------------------|--------------------|---------------------------------------|
| $6 | 0 | 4 | 9 | ? |
| $5 | 2 | 6 | 6 | ? |
| $4 | 3 | 7 | 5 | ? |
| $3 | 4 | 8 | 4 | ? |
| $2 | 6 | 11 | 3 | ? |
| $1 | 9 | 13 | 0 | ? |
> Note: The new demand column reflects higher quantities demanded at each price due to lower CD player prices.
---
a. What happened to the original demand curve?
✔ Answer:
The demand curve shifted to the right.
Because the price of a complementary good (CD player) decreased, consumers want more CDs at every price level → increase in demand.
---
b. How was the equilibrium point affected?
To find the effect, we need to determine the original equilibrium and new equilibrium.
#### Step 1: Find original equilibrium (old demand vs supply)
Original demand (CD players at $75):
- At $4: QD = 3, QS = 5 → surplus
- At $3: QD = 4, QS = 4 → equilibrium!
→ So, original equilibrium price = $3, quantity = 4
#### Step 2: Find new equilibrium (new demand vs supply)
New demand (CD players at $50):
| P | New QD | QS | Shortage/Surplus |
|---|--------|----|------------------|
| 6 | 4 | 9 | 4 - 9 = -5 → Surplus of 5 |
| 5 | 6 | 6 | 6 - 6 = 0 → Equilibrium! |
| 4 | 7 | 5 | 7 - 5 = +2 → Shortage of 2 |
| 3 | 8 | 4 | 8 - 4 = +4 → Shortage of 4 |
| 2 | 11 | 3 | 11 - 3 = +8 → Shortage of 8 |
| 1 | 13 | 0 | 13 - 0 = +13 → Shortage of 13 |
So, new equilibrium is at $5, where QD = QS = 6.
✔ Answer:
The equilibrium price increased from $3 to $5, and quantity increased from 4 to 6.
---
c. What is the surplus at $6.00?
At $6:
- New QD = 4
- QS = 9
- Surplus = QS - QD = 9 - 4 = 5
✔ Answer: Surplus of 5
---
d. What is the shortage at $2.00?
At $2:
- New QD = 11
- QS = 3
- Shortage = QD - QS = 11 - 3 = 8
✔ Answer: Shortage of 8
---
e. How did this scenario benefit the supplier of CDs?
✔ Answer:
Suppliers benefited because:
- The equilibrium price rose from $3 to $5, so they can sell CDs at a higher price.
- The equilibrium quantity increased from 4 to 6, so they sell more units.
- Therefore, total revenue increases (higher price × higher quantity).
- Also, shortages at lower prices indicate strong demand, which gives suppliers market power.
---
## 🔹 Part 2: Changes in Supply
Scenario:
New technology allows producers to make CDs at a reduced rate → supply increases.
We are given:
| Price per Compact Disc | Quantity Demanded | Quantity Supplied (old tech) | Quantity Supplied (new tech) | Shortage or Surplus (New QS minus QD) |
|------------------------|-------------------|-------------------------------|------------------------------|---------------------------------------|
| $6 | 0 | 9 | 14 | ? |
| $5 | 2 | 6 | 12 | ? |
| $4 | 3 | 5 | 10 | ? |
| $3 | 4 | 4 | 8 | ? |
| $2 | 6 | 3 | 6 | ? |
| $1 | 9 | 0 | 3 | ? |
---
a. What happened to the original supply curve?
✔ Answer:
The supply curve shifted to the right.
Because of new technology, producers can supply more CDs at each price, so supply increases.
---
Now let’s compute shortage/surplus for each price using:
> Shortage/Surplus = New QS - QD
If positive → surplus
If negative → shortage
| P | QD | New QS | Surplus/Shortage |
|---|----|--------|------------------|
| 6 | 0 | 14 | 14 - 0 = +14 → Surplus |
| 5 | 2 | 12 | 12 - 2 = +10 → Surplus |
| 4 | 3 | 10 | 10 - 3 = +7 → Surplus |
| 3 | 4 | 8 | 8 - 4 = +4 → Surplus |
| 2 | 6 | 6 | 6 - 6 = 0 → Equilibrium |
| 1 | 9 | 3 | 3 - 9 = -6 → Shortage |
So, new equilibrium is at $2, where QD = QS = 6.
Compare with original equilibrium:
- Original: at $3, QD=4, QS=4 → equilibrium at $3
- New: at $2, QD=6, QS=6 → equilibrium at $2
✔ So, equilibrium price fell from $3 to $2, and quantity increased from 4 to 6.
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## ✔ Final Answers Summary:
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Part 1: Changes in Demand
a. The original demand curve shifted to the right.
b. The equilibrium price increased from $3 to $5, and quantity increased from 4 to 6.
c. Surplus at $6.00 = 5
d. Shortage at $2.00 = 8
e. Suppliers benefited from higher prices and increased sales volume, leading to higher total revenue.
---
Part 2: Changes in Supply
a. The original supply curve shifted to the right due to improved technology.
---
Let me know if you'd like me to graph these changes as well!
Parent Tip: Review the logic above to help your child master the concept of supply and demand graph worksheet.
