Question

please answer all

g.Explain, discuss, and provide a real world example of equilibrium in the market.

h.Explain, discuss, and provide a real world example of a shortage in the market.

i.Explain, discuss, and provide a real world example of a surplus in the market.

j.Explain, discuss, and provide a real world example of disequilibrium in the market.

k.Explain, discuss, and provide a real world example of government imposed price controls: a price ceiling and a price floor.

l.Explain, discuss, and provide a real world example of alternative markets that form due to price controls.

Answer 1

g.Explain, discuss, and provide a real-world example of equilibrium in the market.

Equilibrium in market occurs when demand equals supply.

E.g. in market for pens, pencils, etc. The demand always equals supply and there is no disequilibrium.

h.Explain, discuss, and provide a real-world example of a shortage in the market.
During times of floods or hurricanes, demand for basic necessities like food increases while supply falls, leading to shortage in the economy.

i.Explain, discuss, and provide a real-world example of a surplus in the market.

When supply exceeds demand, there exists surplus. For e.g. when laptops were introduced in the market, the consumer shifted their demand from PCs to laptops, thereby reducing demand for PCs and creating a surplus.

j.Explain, discuss, and provide a real-world example of disequilibrium in the market.
Disequilibrium occurs when either demand or supply falls short of each other leading to either shortage or surplus, as discussed above.

k.Explain, discuss, and provide a real-world example of government imposed price controls: a price ceiling and a price floor.

Price ceiling: Rent controls

Price floor: Minimum wages

l.Explain, discuss, and provide a real-world example of alternative markets that form due to price controls.

E.g. Black markets.

When government interferes in the market and sets price controls, consumers and producers enter into an illegal transaction wherein either of the parties is exploited.

E.g. when rent controls are setup in the housing market, there is shortage of houses in market. Then, tenants who are in dire need of houses have to illegally pay higher than before rents to landlords to get accommodation.