DEMAND & SUPPLY

1. Given the following scenarios, explain with the aid of a diagram, the effects of current COVID-19 surge on equilibrium price and quantity in the specified competitive market.

a) The market for hand sanitizers. b) The market for laptops & tablets. c) The market for home office furniture.

2. Suppose the demand & supply for the market for donuts is given by the following equations: QD = 200 20 P & QS = 30P 50 where P is the price per unit. of donuts, QD is the quantity demanded for donuts and QS

is the quantity

supplied. a) Calculate the equilibrium price & quantity. (8 marks) b) Suppose the government institutes a price floor of $4.00, explain and illustrate the effects in the market. (4 marks) c) Calculate the consumer surplus at market price $4.00. d) Calculate the producer surplus at price $4.00.