Related Questions:
The following table (below) shows the demand and supply schedules for school shoes.
Q3 ai). What would be the equilibrium price
(Pe) and quantity (Qe) for school shoes?
Q3 aii). If the price of school shoes
dropped to $60 per pair, would this result in a shortage or a surplus? What's
the size of this?
First Name
Family Name
ID
Question 3b: Most public schools started to
allow students to wear running shoes to school, how would this affect the
supply or demand for school shoes? Ans: (6 marks or 0 mark)
Q3 bi). The supply or demand curve.
(Highlight the correct answer).
Q3 bii). it will shift to the left or
right. (Highlight the correct answer).
Q3 biii). the equilibrium price would rise
or fall. (Highlight the correct answer).
Q3 biv). the equilibrium quantity would
rise or fall. (Highlight the correct answer).
Q3 ai). Equilibrium Price (Pe) and Quantity (Qe) for School Shoes
The equilibrium price and quantity are determined where the quantity demanded equals the quantity supplied. From the given table, this occurs at:
Therefore, the equilibrium price (Pe) is $90 per pair, and the equilibrium quantity (Qe) is 700 pairs per day.
Q3 aii). Impact of a Price Drop to $60 per Pair
At $60 per pair:
This results in a shortage because the quantity demanded exceeds the quantity supplied.
Hence, there would be a shortage of 600 pairs.
Q3 b: Effect of Allowing Students to Wear Running Shoes
Q3 bi). A change in public school policy allowing students to wear running shoes would affect the demand curve for school shoes, as students might prefer running shoes over school shoes.
Q3 bii). The demand curve will shift to the left, indicating a decrease in demand for school shoes.
Q3 biii). With a decreased demand, the equilibrium price would fall.
Q3 biv). With a decreased demand, the equilibrium quantity would fall.
Answered By