Table 4-3. The demand schedule below pertains to sandwiches demanded per week.

-Refer to Table 4-3.Suppose Alfred,Belinda,and Charissa are the only demanders of sandwiches.Also suppose: • x = 2;
• the current price of a sandwich is $3.00;
• the market quantity supplied of sandwiches is 4;
• the slope of the supply curve is 2.
Then

Question

Table 4-3. The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-3.Suppose Alfred,Belinda,and Charissa are the only demanders of sandwiches.Also suppose: • x = 2;
• the current price of a sandwich is $3.00;
• the market quantity supplied of sandwiches is 4;
• the slope of the supply curve is 2.
Then

Quizplus · Accepted Answer

Given that the current price of a sandwich is $3.00 and the market quantity supplied is 4. With a slope of 2, the quantity supplied will increase by 2 units for every $1 increase in price.

Using the demand schedule, if the quantity demanded by Alfred, Belinda, and Charissa is added up, it comes to 10 sandwiches at a price of $3.00. This means there is a shortage of 4 sandwiches.

If the price of sandwiches were to increase by $1, the quantity supplied would increase by 2, resulting in a market quantity supplied of 6 sandwiches. However, this would only satisfy the demand of Alfred and Belinda, leaving Charissa without a sandwich.

Thus, the equilibrium price must be higher than $4.00, which is $3.00 + ($1 x 2). At a price of $5.00, the quantity supplied is 8 sandwiches, which is enough to satisfy the demand of all three individuals. Therefore, there is a shortage of 6 sandwiches and the equilibrium price of a sandwich is $5.00.

Table 4-3 the Demand Schedule Below Pertains to Sandwiches Demanded Per