Answer:
a) see attached graph. There is nothing unusual with the supply curve, it is simply fixed. This happens to most services, e.g. there is a fixed number of hotel rooms available for rent, in the short run you cannot add more rooms per night if the demand increases. In order to increase the quantity supplied, you would need to build a larger hotel, or in this case, a larger stadium.
b) the equilibrium price is $8 and the equilibrium quantity is 8,000 tickets
c) if the college plans to increase enrollment, the demand might increase, leading to a higher equilibrium price, but the supply will remain the same until the stadium is expanded.
Explanation:
Price Quantity Demanded (Qd) Quantity Supplied (Qs)
$4 10,000 8,000
$8 8,000 8,000
$12 6,000 8,000
$16 4,000 8,000
$20 2,000 8,000
The equilibrium price is $8 and the equilibrium quantity is 8,000 tickets
There is nothing unusual with the supply curve. In this case, the supply curve shows the relationship between the goods that are supplied at their prices.
The demand and supply schedule is given below:
Price Quantity Demanded (Qd) Quantity Supplied (Qs)
$4 10,000 8,000
$8 8,000 8,000
$12 6,000 8,000
$16 4,000 8,000
$20 2,000 8,000
Therefore, the equilibrium price is $8 and the equilibrium quantity is 8,000 tickets
When the college plans to increase enrollment, there will be an increase in the demand, this will shift the demand to the right and lead to a higher equilibrium price. On the other hand, the supply will remain the same until there is an expansion of the stadium.
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