Author Question: Assume that the market for cell phones comprises two buyers and two sellers. The following table ... (Read 37 times)

nelaaney · **on:** Jun 30, 2018

Assume that the market for cell phones comprises two buyers and two sellers. The following table shows the demand and supply of cell phones at different prices. Using the information in the table, determine the market equilibrium price and quantity.

Price () Cell Phones Demanded (Buyer 1 ) Cell Phones Demanded (Buyer 2 )
10 100 80
20 80 65
30 75 50
40 60 45
50 30 30
60 20 22

Price () Cell Phones Supplied (Seller 1 ) Cell Phones Supplied (Seller 2 )
10 10 25
20 30 40
30 50 45
40 55 50
50 65 60
60 75 70

Question 2

Savers are willing to lend out money because:

A) they prefer to spend money in the future rather than today.
B) the rate of inflation in an economy is normally positive.
C) of altruism.
D) the rate of inflation in an economy is normally negative.

perkiness · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

To determine the market equilibrium quantity and price, the first step requires the estimation of market demand and market supply of cell phones. The market demand can be estimated by summing the quantity demanded of each buyer at the different price levels. This is shown in the table below:

Price () Cell Phones Demanded (Buyer

Answer to Question 2

A