Question: a. Given the table below, graph the demand and supply curves for flashlights. Make certain to label the equilibrium price and equilibrium quantity. The graphs do not have to be detailed and perfect. Just label the important points on the graph.

b. Suppose the price is currently $5. What problem would exist in the market? What kind of price pressures would arise, and what might you actually see happening to indicate these pressures? Ultimately what should happen to the selling price?

c. What forces might keep the price from adjusting to the "market-clearing" price? That is, why might prices in a market be "sticky" and take a long time to adjust? Give an example.

d. Describe a product or service that you have purchased, and estimate the amount of "consumer surplus" you received in its purchase. Note that there is no analytical way to do this. It requires a bit of introspection and guess work. Show this graphically.

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Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document