Problem: The weekly demand and supply schedules for oranges in a free market are presented in the table below:
|
Price(Rs/unit)
|
8
|
7
|
6
|
5
|
4
|
3
|
2
|
1
|
|
Quantity demanded (units)
|
6
|
8
|
10
|
12
|
14
|
16
|
18
|
20
|
|
Supplied(units)
|
18
|
16
|
14
|
12
|
10
|
8
|
6
|
4
|
a) List 7 of the major determinants of demand.
b) List 7 of the major determinants of supply.
c) Plot all the demand and supply curves.
d) What is the equilibrium quantity and price?
e) Suppose that owing to changes in health consciousness of consumers, the demand for oranges rises by 4 at each price. Plot the new demand curve on the same graph.
f) What is the new equilibrium price and quantity?
g) Interpret the change in demand curve.