Question: Suppose that in 1984 the demand and supply of scientific calculators (thousand units per month) could be represented in equation form:

D = 16 - 0.3P, S = -8 + 0.5P

In 1985, the demand and supply could be represented as

D = 16 - 0.4P, S = -4 + 0.6P

1. Determine the equilibrium price and quantity in 1984 and in 1985.

b. Fill in the blanks: Between 1984 and 1985, demand and supply

c. What might have caused the change in supply?

d. What might have caused the change in demand?

e. Suppose that the calculator industry has lobbied for a law "to protect the public from cheap calculators." Consequently, 1985 prices are frozen at 1984 levels. Show the results of such a law graphically, and compute it numerically.

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