Assignment: Chapter 3. Demand and Supply, Open Stax Provide clear answers to the following questions. Be sure to answer all parts of the questions. 1. 2. 3. Explain why the "ceteris paribus" (or all other things constant} assumption is used. What is the effect of a price ceiling on the quantity demanded of the product? What is the effect of a price ceiling on the quantity supplied? Why exactly does a price ceiling cause a shortage? The table below [Table 3.8 from Open Stax} shows information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands. Price Qd Qs $120 50 36 $150 40 40 $180 32 48 $210 28 56 $240 24 70 a. What is the quantity demanded and the quantity supplied at a price of 5210? b. At what price is the quantity supplied equal to 48,000? c. Draw a graph the demand and supply curve for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from the table? What are the equilibrium price and equilibrium quantity? d. If the price was 5120, what would the quantities demanded and supplied be? Would a shortage or surplus exist? If so, how large would the shortage or surplus be? The table below [Table 3.9, Open Stax) illustrates the market's demand and supply for cheddar cheese. a. Draw a graph of quantity demanded and quantity supplied and identify the equilibrium price and quantity. b. Next, create a table showing the change in quantity demanded or quantity supplied, and a graph of the new equilibrium, in each of the following situations: . The price of milk, a key input for cheese production, rises, so that the supply decreases by 80 pounds at every price. ' A new study says that eating cheese is good for your health, so that demand increases by 20% at every price. Price per Pound Qd {pounds} 9; [pounds[ 53.00 750 540 $3.20 700 600 $3.40 650 650 $3.60 620 700 $3.80 600 720 $4.00 590 730