Reference no: EM131242351
Bert, as a consumer, places the value on a pair of jeans as follows.
Value of first pair: $70
Value of second pair: $60
Value of third pair: $50
Value of fourth pair: $40
Value of fifth pair: $30
Value of sixth pair: $20
Value of seventh pair: $10
Ernie, as a producer, pays the following cost to produce jeans.
Cost of first pair: $10
Cost of second pair: $20
Cost of third pair: $30
Cost of fourth pair: $40
Cost of fifth pair: $50
Cost of sixth pair: $60
Cost of seventh pair: $70
Using the information given above, answer the following questions.
(1) If the price is $20, how many pairs of jeans will be demanded by Bert?
(2) If the price is $20, how many pairs of jeans will be supplied by Ernie?
(3) Explain the reason why $30 price is not an equilibrium price.
(4) What is behind the force that moves the price from $30 to the equilibrium level?
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