variables, graph, supply, demand
1.In the following chart you have information related to the unit price of wine bottles, the
number of bottles consumers are willing to buy, and the number of bottles producers are
willing to produce.
Price (usd) demand supply
10 300 60
11 260 80
12 220 100
13 180 120
14 140 140
15 100 160
a. Draw the demand and supply curve in the same cartesian plane. (Remember that
price is in the y axis and supply and demand are in the x axis).
b. Why is the demand curve decreasing? Why is the supply curve increasing?
c. What is the price of equilibrium in the market of wine? What are the quantities
supplied and demanded of equilibrium?
d. What is the number of bottles that producers are willing to supply if the price is 15
usd? What is the number of bottles that consumers are willing to buy at that price?
Describe the mechanism that makes that the price goes down from 15 usd to 14
e. What is the number of bottles that producers are willing to supply if the price is
10usd? What is the number of bottles that consumers are willing to buy at that price?
Describe the mechanism that makes that the price goes up from 10 usd to 14
2. Assume that you have the following initial demand and supply curves
For now, x is any good. The red curve is the demand curve, and the green one is the supply curve. The
initial price of equilibrium is 𝑃0
𝑒 and the initial quantities demanded and supplied in equilibrium are
𝐷0
𝑒 and 𝑄0
𝑒
Explain what happens to the price and quantities of equilibrium in the following cases. (Hint: always
think about the following: the problem given to me describes a shift in the demand or the supply
curve?)
a. Let’s assume that the good represented by x is tea (in bags). In a given moment the
price of tea is above the equilibrium price
b. Let’s assume that the good represented by x is tea (in bags). However, there is a
decrease in the price of coffee.
Px
Dx,
Qx
Dx
Qx
𝑃0
𝑒
𝐷0
𝑒 = 𝑄0
𝑒
c. Let’s assume that the good represented by x is tea (in bags). Tea bags are made of
bleached paper, and the price of this kind of paper has increased.
