Question

Graph the following supply and demand curve and answer the questions. The price of Crude oil is
$85.25 per barrel. The demand is in millions
of barrels. Label your graph corrctly.
$
Supply
Demand
150
600
100
120
550
150
100
400
200
85.25
250
275
75.00
175
400
50
100
500
1. What is the equilibrium price?
2. What is the equilibrium Quantity?
3. What does the equilibrium point tell us?

Answer 1

Here is the graph of the supply and demand curve:

From the graph, we can see that the equilibrium price is approximately $75 per barrel and the equilibrium quantity is approximately 200 million barrels.

The equilibrium price is the price at which the quantity demanded equals the quantity supplied. In this case, it is $75 per barrel.

The equilibrium quantity is the quantity demanded and supplied at the equilibrium price. In this case, it is approximately 200 million barrels.

The equilibrium point tells us the price and quantity at which the market is in balance, where the quantity demanded equals the quantity supplied. At this point, there is no surplus or shortage of crude oil.