What is joslin equilibrium price

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After Joslin had been running her business for several months, she began to feel confident of her success . She was making a profit. It was not as much as she had hoped for, but it was still a profit. One thing she had not decided was what price she should charge. She kept having sales an d specials that she hoped would hide the fact that she was having a hard time making up her mind. Finally she combined the in formation she had gathered in a demand-and-supply schedule and came up with an answer she hoped would work . Study her schedules below an d answer the questions that follow.

Price

Quantity of bags Joslin believes will be demanded

Quantity of bags Joslin is willing to supply

Difference between quantity demanded and quantity supplied

$10.50

800

1,600

800-bag surplus

$10.00

1,000

1,400

400-bag surplus

$9.50

1,200

1,200

equal

$9.00

1,400

800

600-bag shortage

Answer Choices:

a. $9.50 

b. reduce the shortage 

c. shortage 

d. surplus 

e. reduce the surplus

Questions:

1. What is Joslin's equilibrium price?

2. If Joslin charged $10.50 a bag, what problem would she have?

3. If Joslin charged $9.00 a bag, what problem would she have?

4. If Joslin charged $9, why would she probably decide to increase her price?

5. If Joslin charged $10 .50, why would she probably have to lower her price?

Reference no: EM133067165

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