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Given the scenario below, indicate what happens to demand, supply, equilibrium quantity, and equilibrium price in a competitive market.Identify the... |

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Answer:

In a scenario where schools are requiring students to purchase a calculator, an increase in the quantity demanded would occur. This would cause a movement of the demand curve for calculators to expand to the right. That is, at any given price, the demand for calculators would be higher than it was previously.

The equilibrium price would therefore increase if there was no corresponding change in quantity of calculators supplied.

Efficiency in a workplace means that more unit output occurs with no change in unit input costs. An increase in the efficiency of calculator suppliers would mean more calculators could be made with no increase in costs.

This efficiency would result in the supply of calculators increasing at any given price level. There would be an expansion of the supply curve to the right.

Therefore (depending on the actual numeric figures of demand and supply of calculators) the interaction of these two events may result in no change to the equilibrium price of calculators. If the change in quantity demanded is matched by the increase in quantity supplied then the result could be that although the equilibrium quantity has expanded, the equilibrium price may not in fact change.

There are of course many factors that will influence the above scenario. For example, many students may find calculators that have been pre-owned and purchase them second-hand or receive them from siblings. The schools may buy class sets of calculators for students to loan in a similar way to library books.

Economics can, however, improve our ability to predict possible results of certain events.

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