Ch3WorksheetSchiller 2018 Compatibility Modeword ces Mailing

Ch3-Worksheet-Schiller 2018 [Compatibility Mode-word ces Mailings Review View Help AaBbCel daBbCcl AaßbCa AaBbCel AaBbCd Aal y A Paragraph Fill in the Worldwide Market column in the following table and answer the questions below. 2) Table 32 Demand and supphy for trucks (millions of trucks per year) Quantity Demanded By Rest of World Worldwide Market $50,000 $40,000 $30,000 $20,000 15 20 30 50 20 30 50 70 Rest of WorldWorldwide Market $50,000 $40,000 $30,000 $20,000 50 30 25 15 60 20 10 a) In the abore table, if the worldwide price of trucks were $30,000, the worldwide truck market would be in a: (surplus, shortage, or equilibrium) Same as a. but assume the worldwide price of trucks equals $50,000 At what price does equilibrium occur? b) c)

Solution

Quantity demanded by:

Quantity supplied by

a) If the worldwide price is $30000, the demand of worldwide market is 80 units and supply of worldwide market be 35 units. Therefore demand is more than supply which creates a shortage of (80-35)=45 units

b) If the worldwide price is $50000, the demand of worldwide market is 35 units and supply of worldwide market be 110 units. Therefore supply is more than demand which creates a surplus of (110-35)=75 units.

c) Equilibrium has occurred where supply=demand at a worldwide price. At $40000, Worldwide demand=worldwide supply=50 units. So at $40000 equilibrium is occurred.

Price	Americans	Rest of the world	worldwide market
$50000	15	20	35
$40000	20	30	50
$30000	30	50	80
$20000	50	70	120