$$\begin{array} { | c | c | c | }
\hline \text { Quantity Demanded } & \text { Price } & \text { Quantity Supplied } \
\hline 5 & \$ 7 & 9 \
\hline 6 & 6 & 8 \
\hline 7 & 5 & 7 \
\hline 8 & 4 & 6 \
\hline 9 & 3 & 5 \
\hline 10 & 2 & 4 \
\hline 11 & 1 & 3 \
\hline
\end{array}$$ Refer to the above table. If demand decreased by 4 units at each price and supply decreased by 2 units at each price, what would the new equilibrium price and quantity be?
A) $3 and 5 units
B) $4 and 4 units
C) $5 and 5 units
D) $6 and 6 units

Question

$$\begin{array} { | c | c | c | } 
\hline \text { Quantity Demanded } & \text { Price } & \text { Quantity Supplied } \
\hline 5 & \$ 7 & 9 \
\hline 6 & 6 & 8 \
\hline 7 & 5 & 7 \
\hline 8 & 4 & 6 \
\hline 9 & 3 & 5 \
\hline 10 & 2 & 4 \
\hline 11 & 1 & 3 \
\hline
\end{array}$$ Refer to the above table. If demand decreased by 4 units at each price and supply decreased by 2 units at each price, what would the new equilibrium price and quantity be?
A) $3 and 5 units
B) $4 and 4 units
C) $5 and 5 units
D) $6 and 6 units

Quizplus · Accepted Answer

To find the new equilibrium price and quantity, we need to adjust both the demand and supply columns in the table based on the given information.

For demand:

- Decreasing by 4 units at each price means subtracting 4 from the quantities in the "Quantity Demanded" column for each row.

For supply:

- Decreasing by 2 units at each price means subtracting 2 from the quantities in the "Quantity Supplied" column for each row.

The adjusted table looks like this:

$$\begin{array} { | c | c | c | } 
\hline \text { Quantity Demanded } & \text { Price } & \text { Quantity Supplied } \
\hline 1 & \$ 7 & 7 \
\hline 2 & 6 & 6 \
\hline 3 & 5 & 5 \
\hline 4 & 4 & 4 \
\hline 5 & 3 & 3 \
\hline 6 & 2 & 2 \
\hline 7 & 1 & 1 \
\hline
\end{array}$$

To find the new equilibrium price and quantity, we need to find where the quantity demanded equals the quantity supplied. From the adjusted table, we can see that this occurs at a price of $\$4$ and a quantity of 4 units. Therefore, the new equilibrium price and quantity are $\$4$ and 4 units, respectively.

Choice B is the correct answer.

Refer to the Above Table