Individual and market demand
Suppose that Gilberto and Juanita are the only consumers of scented candles in a particular market. The following table shows their annual demand schedules:
Price
Gilberto’s Quantity Demanded
Juanita’s Quantity Demanded
(Dollars per candle)
(Candles)
(Candles)
2
16
32
4
10
24
6
6
16
8
2
12
10
0
8
On the following graph, plot Gilberto’s demand for scented candles using the green points (triangle symbol). Next, plot Juanita’s demand for scented candles using the purple points (diamond symbol). Finally, plot the market demand for scented candles using the blue points (circle symbol).
Created with Rapha«l 2.1.2
Gilbertos Demand
Juanitas Demand
Market Demand
0
8
16
24
32
40
48
12
10
8
6
4
2
0
PRICE (Dollars per candle)
QUANTITY (Candles)
5. A change in supply versus a change in quantity supplied
The following calculator shows the supply curve for sedans in an imaginary market. For simplicity, assume that all sedans are identical and sell for the same price. Two factors that affect the supply of sedans are the level of technical knowledgein this case, the speed with which manufacturing robots can fasten bolts, or robot speedand the wage rate that auto manufacturers must pay their employees. Initially, the graph shows the supply curve when robots can fasten 2,500 bolts per hour and autoworkers earn $25 per hour.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
Created with Rapha«l 2.1.2
0
100
200
300
400
500
600
700
800
900
50
40
30
20
10
0
PRICE (Thousands of dollars)
QUANTITY (Sedans per month)
Supply
Graph Input Tool
Supply for Sedans
20
225
Price of a Sedan
(Thousands of dollars)
Quantity Supplied
(Sedans per month)
SUPPLY SHIFTERS
2500
25
Robot Speed
(Bolts per hour)
Autoworker Wage
(Dollars per hour)
Consider the previous graph. Suppose that the price of a sedan decreases from $22,000 to $17,000. This would cause the of sedans to decrease, which is reflected on the graph by a the supply curve.
Suppose the workers’ union negotiates a pay raise. This causes a the supply curve because the pay raise makes cars .
