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Supply and Demand for Easter Eggs Data

Essay by   •  June 6, 2011  •  Essay  •  940 Words (4 Pages)  •  1,350 Views

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1: Using the supply and demand model, we need to find out what the demand is for Easter eggs and what the suppliers are willing to produce and at what price, what price buyers are willing to pay.We need to find the market equilbrium price where the supply and demand are equal .This can be done by graphically analysising all the data to find the equilibrium price with all things being equal .The equilibrium price is where there is no surplus left in market or shortage of supply.

Table 1

Supply and demand for Easter Eggs Data

1 2 3

Total quantity Price per Total quantity

Supplied per week units Demand per week

12000 5 2000

10000 4 4000

7000 3 7000

4000 2 10000

1000 1 16000

Following equilibrium process we found that the equilibrium price for Easter eggs in the market is $3 dollars, that is where the suppliers make anoth profit to keep manufacturing the Easter eggs at 7000 units per week.That is where the demand is at a price where the market clears and there is no surplus of product left. And there is no shortage of supply .This is if all things being equal .With table no 2 we can graphical see what the varies what the different prices do to the market ,with the supply and demand .

Equilibrium is defined to the price -quantity pair where the quantity demand is equal to the quantity supplied, represented by the intersection of the demand and supply curves. 2

Resource prices have an effect on the suppliers supply curve .A firm's supply curve is based on production costs; a firm must receive higher prices for additional units of output because those extra units cost more to produce. An increase in resource prices raises production costs and reduces supply; that is, shifts the supply curve to the left. 5

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