Market equilibrium worksheet

Market equilibrium worksheet

In the diagram to the right, plot the following hypothetical supply and demand information for personal computers (PCs):

Quantity Demanded (Qd - millions)	Price ($)	Quantity Supplied (Qs - millions)
2	$3,000	17
4	2,500	16
7	2,000	14
11	1,500	11
16	1,000	7
22	500	2

2.	The equilibrium price "clears the market," in that quantity demanded equals quantity supplied. The equilibrium price = ______

		At a price of $2,500...	At a price of $1,000...
(1)	Is there excess demand or excess supply?
(2)	How many million units?
(3)	Are PC inventories rising or falling?
(4)	Is the incentive to raise or lower price?

Indicate whether equilibrium price (P) and quantity (Q) will rise (+) or fall (-) if ...