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The use of E-Books has increased in recent years, especially with the advent of mobile E-Readers. A marketing research firm recently developed the following supply and demand schedules for E-books:
Price/E-Book
Quantity Demanded
Quantity Supplied
$18 4000 10,000
16 5000 9500
14 6000 9000
12 7000 8500
10 8000 8000
9 9000 7500
8 10000 7000
7 11000 6500
6 12000 6000
5 13000 5500
4 14000 5000
2 15000 4500
Assignment Guidelines:
Using Microsoft (MS) Excel, construct a graph showing supply and demand in the E-Book market based on the data above. When finished, copy and paste into an MS Word document.
In your MS Word document, below your imported graph, respond to the following:
Explain how the Laws of Supply and Demand are illustrated in this graph.
Define equilibrium. What is the equilibrium price and quantity in this market?
Assume that the government imposes a price floor of $12 in the E-Book market. Explain what would happen in this market.
Assume that the price floor is removed and a price ceiling is imposed at $6. Explain what would happen in this market.
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