North Virginia Community College Why Does the Demand Curve Slope Downward Questions

Description

4.4 Why does the demand curve slope downward? Why does the supply curve slope upward? Given the demand and supply schedules below:

Price (dollars per CD)

Quantity Demanded (per day)

Quantity Supplied (per day)

5.00

300

100

6.00

250

150

7.00

200

200

8.00

150

250

9.00

100

300

What is the market equilibrium?

If the price of a CD is set at $6.00, describe the situation in the CD market.

A rise in the number of recording studios increases the quantity of CDs supplied by 75 a day at each price. People download more music from the Internet and the quantity demanded of CDs decreases by 25 a day at each price. With no change in incomes, what is the new equilibrium?

Tags: demand and supply demand curve market equilibrium
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