The table below shows the demand and supply schedule for gasoline in a hypothetical country called Microland.Price per litre ($)Quantity Demanded in 000Quantity Supplied in 000 litres (per Month)litres (per month)11.02710 2259 4238 6207 8176 10155 12124 14103 1672 1851 33 1a. Construct the demand and supply curves for gasoline to show the market equilibrium for gasoline.1b. Given a new government policy in Microland, Gasoline producers have started to obtain subsidies from the government. Construct a NEW diagram to show the impact of the subsidy on the market equilibrium

In the free market, the equilibrium quantity and demand is determined by the forces of demand curve…

Answered: The table below shows the demand and…

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter16: Public Goods And Public Choice

Section: Chapter Questions

Problem 14PAE

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The table below shows the demand and supply schedule for gasoline in a hypothetical country called Microland.

Price per litre ($)	Quantity Demanded in 000	Quantity Supplied in 000
	litres (per Month)	litres (per month)
11	.	0	27
10		2	25
9		4	23
8		6	20
7		8	17
6		10	15
5		12	12
4		14	10
3		16	7
2		18	5
1		3	3

1a. Construct the demand and supply curves for gasoline to show the market equilibrium for gasoline.

1b. Given a new government policy in Microland, Gasoline producers have started to obtain subsidies from the government. Construct a NEW diagram to show the impact of the subsidy on the market equilibrium

Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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