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Suppose that the demand and supply of liter of petrol are given in table 1 below: Price (RM) Quantity demanded (liter per day) Quantity supplied
- Suppose that the demand and supply of liter of petrol are given in table 1 below:
Price (RM) | Quantity demanded (liter per day) | Quantity supplied (liter per day) |
0.80 | 8 | 24 |
0.75 | 10 | 22 |
0.70 | 12 | 20 |
0.65 | 14 | 18 |
0.60 | 16 | 16 |
0.55 | 18 | 14 |
Table 1
- What is the equilibrium price and quantity of petrol?
- Use a graph paper to draw a demand curve and supply curve based on thetable above.
- Now suppose that a political crisis in the Middle East lead to a decrease in the supply of petrol by 8 liter per day at every price. Show the change in the graph paper and show the new equilibrium position.
- What is the new equilibrium price of petrol?
- What is the new equilibrium quantity of petrol?
- In order to help the consumer, the government imposes a price control of RM0.60 per liter:
- Give the name of this price control.
- How much petrol will be demanded by consumer at this price?.
- How much petrol will be offered for sale by suppliers?
- How much petrol will actually be sold?
- Calculate the excess quantity of petrol demanded.
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