12. Market equilibrium and disequilibrium
The following graph shows the monthly demand and supply curves in the market for kettles.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
0
50
100
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200
250
300
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80
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48
40
32
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8
0
PRICE (Dollars per kettle)
QUANTITY (Kettles)
Demand 
Supply 
Graph Input Tool
Market for Kettles
 
Price
(Dollars per kettle)
32
 
Quantity Demanded
(Kettles)
300
 
Quantity Supplied
(Kettles)
125
The equilibrium price in this market is
$
per kettle, and the equilibrium quantity is
 kettles per month.
Complete the following table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and whether this places upward or downward pressure on prices.
Price
Shortage or Surplus
Shortage or Surplus Amount
Pressure
(Dollars per kettle)
(Kettles)
48	    	
    
32	    	
    


To solve this, we need to find the equilibrium price and quantity by identifying where the quantity demanded equals the quantity supplied. From the information provided, let's break down the analysis step-by-step:

### 1. **Finding the Equilibrium:**
The equilibrium price and quantity occur where the demand and supply curves intersect, meaning the quantity demanded equals the quantity supplied.

From the data provided:

- **At Price = $32 per kettle:**
  - Quantity Demanded = 300 kettles
  - Quantity Supplied = 125 kettles

Here, there's a shortage because the quantity demanded (300) exceeds the quantity supplied (125).

To find the exact equilibrium, let's assume this is visually represented in the graph and typically found where both curves meet. For accurate results, we need the complete graph data.

### 2. **Shortage or Surplus at Different Prices:**
We will complete the table for prices $48 and $32 using the concepts of shortage and surplus.

#### Price: $48
- **Quantity Demanded** is likely less than the quantity supplied because price increases generally lead to a decrease in quantity demanded.
- **Quantity Supplied** will be higher since higher prices incentivize producers to supply more.
- **Shortage or Surplus:** Surplus (since QS > QD)
- **Shortage or Surplus Amount:** (We need specific numbers from the graph)
- **Pressure:** Downward pressure on prices (since surplus will drive prices down).

#### Price: $32
- **Quantity Demanded:** 300 kettles
- **Quantity Supplied:** 125 kettles
- **Shortage or Surplus:** Shortage (since QD > QS)
- **Shortage or Surplus Amount:** 300 - 125 = 175 kettles
- **Pressure:** Upward pressure on prices (since shortage will drive prices up).

### 3. **Equilibrium Price and Quantity:**
- If provided with the data points where demand equals supply, I could pinpoint the equilibrium price. For now, I’ll assume it's around $40-50 based on typical supply and demand interactions.

### Completing the Table:
| Price (Dollars per kettle) | Shortage or Surplus | Shortage or Surplus Amount (Kettles) | Pressure          |
|----------------------------|---------------------|-------------------------------------|-------------------|
| 48                         | Surplus             | (Exact value needed)                | Downward          |
| 32                         | Shortage            | 175                                 | Upward            |

### Conclusion
The equilibrium price is not directly given, but likely lies where shortage and surplus balance each other, with no pressure on prices.

**Would you like to refine this based on additional data or graph analysis?** 

**Related Questions:**
1. What are the specific supply and demand quantities at different prices (like $24 or $40)?
2. How would external factors like changes in production costs shift the supply curve?
3. What could cause a shift in the demand curve for kettles?
4. How would a price ceiling or floor impact this market?
5. How do taxes affect the equilibrium price and quantity?

**Tip:** Always remember that equilibrium is where market forces balance, with no tendency for price to change unless external factors intervene.

The query submitted by the user: Market equilibrium and disequilibrium. The following graph shows the monthly demand and supply curves in the market for kettles. Use the graph input tool to help you answer the following questions. The equilibrium price in this market is $ per kettle, and the equilibrium quantity is kettles per month. Complete the table by indicating at each price whether there is a shortage or surplus in the market, the amount of that shortage or surplus, and whether this places upward or downward pressure on prices.

Learn how to analyze market equilibrium, disequilibrium, and the impacts of shortages and surpluses using the supply and demand curves for kettles. This problem covers key economic concepts such as equilibrium price, upward and downward price pressures, and how market forces balance. Suitable for high school students in Grades 10-12.

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