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What is the equilibrium price and quantity of petrol

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Reference no: EM133133252

Suppose that the demand and supply of liter of petrol are given in table 1 below:

Price (RM)

Quantity demanded (liter per day)

Quantity supplied (liter per day)

0.80

8

24

0.75

10

22

0.70

12

20

0.65

14

18

0.60

16

16

0.55

18

14

Table 1

  1. What is the equilibrium  price and quantity of petrol?
  2. Use a graph paper to draw a demand curve and supply curve based on the table above.
  3. Now suppose that a political crisis in the Middle East lead to a decrease in the supply of petrol by 8 liter per day at every price. Show the change in the graph paper  and show the new equilibrium position.
  4. What is the new equilibrium price of petrol?
  5. What is the new equilibrium quantity of petrol?
  6. In order to help the consumer, the government imposes a price control of RM0.60 per liter:
  7. Give the name of this price control.
  8. How much  petrol will be demanded by consumer at this price?.
  9. How much petrol will be offered for sale by suppliers?
  10. How much petrol will actually be sold?
  11. Calculate the excess quantity of petrol demanded.

Reference no: EM133133252

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