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Supply, Demand, and Government in the Markets

In: Business and Management

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Module 1_Assignment 3
Assignment 3: Supply, Demand, & Government in the Markets

1. Using Microsoft Excel, draw a graph illustrating the supply and demand in this market.

2. What is the equilibrium Price and Quantity in the market?
This is where the quantity demanded and the quantity supplied are equal. The corresponding price is the equilibrium price and the quantity is the equilibrium quantity.

*Let us take the first line of data from the Spreadsheet as an example:
Price- $200 Quantity Demanded- 1000 Quantity Supplied- 2200
Here there is an excess supply amount, so there are more computers than that are actually wanted. At this point, the sellers would recognize there are fewer buyers for their product at the current set price. Now they would attempt attracting buyers for the excess supply available by offering these goods at a lower price. By doing so, according to the law of demand, buyers will now purchase more of the computers and the supply overage will decrease until it eventually disappears. Now the market will reach the intersection point in which supply is equal to demand.

*Now we can look at a different scenario in which the demand of computers are higher than the supply. Looking at the last line of data from the Spreadsheet:
Price- $25 Quantity Demanded- 2750 Quantity Supplied-1150
This would display a price that is below the intersection point. Because there is such a high demand for the product, the consumer would be willing to pay more to obtain it. As the market price increases, the demand will decrease and will eventually cease at the intersection of the two curves, thus reaching Market equilibrium price.

3. Now suppose the government imposes a special tax on these computers. Describe what would happen in this market, in terms of the supply and demand curve?
Imposing taxes on these computers would decrease both supply and

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