Supply and Demand

Supply and Demand

Consider the market for ready-mixed concrete in Dammam. The demand curve is given by:

Don't use plagiarized sources. Get Your Custom Essay on
Supply and Demand
Just from $13/Page
Order Essay

 

Where:

  • is the quantity demanded for ready-mixed concrete in thousand cubic meters per month.
  • is the average income in Dammam per month.
  • is the price of ready-mixed concrete.

 

The supply curve is

Where:

  •  is the quantity supplied for ready-mixed concrete in cubic meters per month.
  •  is the price of 1 kilogram of cement.

 

  • If the average income in Dammam is = SAR 11,000 and the price of cement is  = SAR 30, what is equilibrium point in the ready-mixed concrete market in Dammam?  (Show your steps) (Draw a graph on the next page to illustrate your answer)

 

 

 

 

 

 

 

 

 

Graph:

 

 

 

 

 

 

 

 

 

  • Suppose that the price of cement increased to  = SAR 50 because of a shortage in the cement industry. Find the new equilibrium. (Show all your steps and draw a graph of the new and original curves from part (a) to illustrate your answer).