Assume gadgets are sold in a competitive market, the equilibrium price is $6, and the equilibrium quantity is 500 units. Using the numerical values above, draw a correctly labeled graph of the market for gadgets and show each of the following.

Q: Assume that the graphs show a competitive market for the product stated in the question. Select the…

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A: Price - decreases Quantity - Uncertain (indeterminate)

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Q: For the following exercise, refer to the graph of the coffee market on the right. Event: Suppose…

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Market Surplus and Shortage Analysis

In everyday language, a “surplus” indicates that there is an excess of something, while a “shortage” means that there is a scarcity of it. In economics, “market surplus” refers to the condition where the quantity of a certain good more available than what is required or “demanded” by the market. In the same way, a “market shortage” refers to the condition where the quantity of a certain good is less available than what is “demanded” by the market. If quantity in demand is written as Qd and quantity that is supplied is written as Qs, then, the condition Qs > Qd indicates market surplus and condition Qd > Qs indicates market shortage.