Why does the demand curve slope downward?  Why does the supply curve slope upward? Given the demand and supply schedules below: Price (dollars per CD)Quantity Demanded (per day)Quantity Supplied (per day)5.003001006.002501507.002002008.001502509.00100300 What is the market equilibrium? If the price of CD is $6.00, describe the situation in the CD market. Explain how market equilibrium is restored. A rise in incomes increases the quantity of CDs demanded by 100 a day at each price. What is the new equilibrium and how does the market adjust? A rise in the number of recording studios increases the quantity of CDs supplied by 75 a day at each price. People download more music from the Internet and the quantity demanded of CDs decreases by 25 a day at each price. With no change in incomes, what is the new equilibrium and how does the market adjust?

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Asked Mar 2, 2019
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Why does the demand curve slope downward?  Why does the supply curve slope upward? Given the demand and supply schedules below:

 

Price (dollars per CD)

Quantity Demanded (per day)

Quantity Supplied (per day)

5.00

300

100

6.00

250

150

7.00

200

200

8.00

150

250

9.00

100

300

 

What is the market equilibrium?

 

If the price of CD is $6.00, describe the situation in the CD market. Explain how market equilibrium is restored.

 

A rise in incomes increases the quantity of CDs demanded by 100 a day at each price. What is the new equilibrium and how does the market adjust?

 

A rise in the number of recording studios increases the quantity of CDs supplied by 75 a day at each price. People download more music from the Internet and the quantity demanded of CDs decreases by 25 a day at each price. With no change in incomes, what is the new equilibrium and how does the market adjust?



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Step 1

Since you have not mentioned the sub parts you need help with and since we are entitled to answer up to three sub-parts, we will be answering the first three questions. Please resubmit the question and mention the other sub-parts you would like to be answered.

Step 2

Demand: Demand of a good or service refers to the different combinations of prices and output that consumers are willing and able to purchase at those prices. The demand curve is slopes downward indicating that the demand is higher at a lower price.

Supply: Supply of a good or service refers to the different combinations of prices and the output that producers are willing and able to sell at respective prices. The supply curve slopes upwards indicating that a higher price would correspond to higher supply. The following figure shows a typical demand curve and supply curve.

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Step 3

a) The demand curve slopes downward because of law of demand. Law of demand states that ceteris paribus (other things being constant), a rise in the price of a good leads to decrease in the quantity demanded for that good. That is, the quantity demanded of a good and its own price vary inversely.

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