Question #1:Using a product of your choice along with prices and quantities you select, create a...

Question

Question #1:Using a product of your choice along with prices and quantities you select, create a
tutorial that will teach somebody how to draw a supply curve, a demand curve, and determine the
equili
ium point. Also explain the factors that could cause the supply and demand curves to
shift up or down.
Demand and supply are the most fundamental concept of microeconomic theory. Let us learn
how to draw the demand and supply schedules and how to find out equili
ium price and
quantity demanded.
The price and co
esponding quantity demanded and supplied are shown in the table below.
Price per
cup of
coffee
Quantity
demanded
Quantity Supplied
0.5 1200 600
0.75 1100 700
1 1000 800
1.25 900 900
1.5 800 1000
1.75 700 1100
2.2 600 1200
In order to find out the equili
ium price and quantity we need to first draw the demand and
supply curve. Demand curve can be drawn in excel – measuring quantity demanded in the X
axis and the price per coffee in the Y axis. The demand curve as I have drawn below will be
downward sloping – this is because the inverse relation between price and quantity demanded.
Similarly supply curve need to be drawn in the same graph measuring quantity supplied in the x
axis and price per coffee in the Y axis. Supply curve as I have drawn below will be upward
sloping implying the direct relation between price and quantity supplied.
If we plot the given data in the above table, the demand and supply curve will look like this.
Market equili
ium can be obtained at the point where quantity demanded for the coffee
ecomes equal to the quantity supplied of coffee. In the above graph market equili
ium price
will be $1.25 and market equili
ium quantity = 900.
Now there are many factors that will have an influence of the demand and supply. For example if
the price of coffee per cup rises, then there will be only movement along the demand and supply
curve. But neither the demand for coffee nor the supply of coffee curve will shift with the change
in price per cup of coffee. Now if the income of the consumers in the locality increases or the
number of consumers increase then the demand curve will shift to the right. The demand curve
will also shift to the right if the price of tea increases because tea is a close substitute of coffee. If
the consumers expect a price rise then also the demand curve will shift rightwards. An increase
in advertising expenditure will cause the demand curve to shift to the right.
As far as supply curve is concerned, it will shift to the right if there is a technological
advancement in coffee production. On the other hand an increase in the price of coffee beans will
lead to reduce the supply of coffee in the market.
0
0.5
1
1.5
2
2.5
0 200 400 600 800 1000 1200 1400
price per cup
Quantity demanded...

Robert · Accepted Answer

Question #1:Using a product of your choice along with prices and quantities you select, create a 
tutorial that will teach somebody how to draw a supply curve, a demand curve, and determine the 
equilibrium point. Also explain the factors that could cause the supply and demand curves to 
shift up or down.
 Demand and supply are the most fundamental concept of microeconomic theory. Let us learn 
how to draw the demand and supply schedules and how to find out equilibrium price and 
quantity demanded.  
The price and corresponding quantity demanded and supplied are shown in the table below.  
Price per 
cup of 
coffee  
Quantity 
demanded  
Quantity Supplied  
0.5 1200 600 
0.75 1100 700 
1 1000 800 
1.25 900 900 
1.5 800 1000 
1.75 700 1100 
2.2 600 1200
In order to find out the equilibrium price and quantity we need to first draw the demand and 
supply curve.  Demand curve can be drawn in excel – measuring quantity demanded in the X 
axis and the price per coffee in the Y axis. The demand curve as I have drawn below will be 
downward sloping – this is because the inverse relation between price and quantity demanded. 
Similarly supply curve need to be drawn in the same graph measuring quantity supplied in the x 
axis and price per coffee in the Y axis. Supply curve as I have drawn below will be upward 
sloping implying the direct relation between price and quantity supplied.
 If we plot the given data in the above table, the demand and supply curve will look like this. 
Market equilibrium can be obtained at the point where quantity demanded for the coffee 
becomes equal to the quantity supplied of coffee. In the above graph market equilibrium price 
will be $1.25 and market equilibrium quantity = 900. 
Now there are many factors that will have an influence of the demand and supply. For example if 
the price of coffee per cup rises, then there will be only movement along the demand and supply 
curve. But neither the demand for coffee nor the supply of coffee curve will shift with the change 
in price per cup of coffee. Now if the income of the consumers in the locality increases or the 
number of consumers increase then the demand curve will shift to the right. The demand curve 
will also shift to the right if the price of tea increases because tea is a close substitute of coffee. If 
the consumers expect a price rise then also the demand curve will shift rightwards. An increase 
in advertising expenditure will cause the demand curve to shift to the right. 
As far as supply curve is concerned, it will shift to the right if there is a technological 
advancement in coffee production. On the other hand an increase in the price of coffee beans will 
lead to reduce the supply of coffee in the market.
0
0.5
1
1.5
2
2.

Question #1: Using a product of your choice along with prices and quantities you select, create a tutorial that will teach somebody how to draw a supply curve, a demand curve, and determine the...

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