Question: Plot the demand and supply schedules for jeans in Table below as demand and supply curves.

Price Quantity Quantity

Demanded of Supplied of

Jeans (units) Jeans (units

____________________________________________

10 5 25

8 10 20

6 15 15

2 20 10

0 25 5

a. What equilibrium price would this market establish?

b. If the state were to pass a law that the price of jeans could not be more than $2, how would you describe the market response?

c. If the state were to pass a law that the price of jeans could not be less than $8, how would you describe the market response?

d. If the preferences changed and people wanted to buy twice as much as before at each price, what will the equilibrium price be?

e. If, in addition to the above change in preferences, there is an improvement in technology that allows firms to produce this product at lower cost than before, what will happen to the equilibrium?