c. Suppose that the price of tickets at your local cinema is determined by market forces. Currently,

the demand and supply schedules are as follows:

Prices (TK) Quantity demanded Quantity supplied

40 1000 600

80 800 600

120 600 600

160 400 600

200 200 600

i. Draw the demand and supply curves. What is unusual about this supply curve? Why

might this be true?

ii. What are the equilibrium price and quantity of tickets?

iii. Demographers tell you that next year there will be more film-goers in the area. The

additional people will have the following demand schedule:

Prices (TK) Quantity demanded

40 500

80 400

120 300

160 200

Now, calculate the new demand schedule for the entire area. What will be the new

equilibrium price and quantity?