Homework SoursePlease show the work process Thank you so much The market fo
Please show the work process Thank you so much
The market for bicycles in rural Indiana is described in the table below. Public spending improves bicycle lanes in rural areas. As a result, the demand for bicycles shifts to the right by 125 bicycles at every price.
Price (dollars)
a. The initial equilibrium price was $ and the initial equilibrium quantity was bicycles.
b. The new equilibrium price is $ and the new equilibrium quantity is bicycles.
| Indiana Bicycle Market | |||
| Price (dollars) | Initial Quantity of Bicycles Demanded | Quantity of Bicycles Supplied | New Quantity of Bicycles Demanded |
| $200 | 1,000 | 625 | 1,125 |
| 225 | 950 | 700 | 1,075 |
| 250 | 900 | 775 | 1,025 |
| 275 | 850 | 850 | 975 |
| 300 | 800 | 925 | 925 |
| 325 | 750 | 1,000 | 875 |
| 350 | 700 | 1,075 | 825 |
Solution
a. The initial equilibrium price was $275 and the initial equilibrium quantity was 850 bicycles.
b. The new equilibrium price is $300 and the new equilibrium quantity is 925 bicycles.
