Finding the Equilibrium Point

At the beginning of 2005, Toyota sold 175,000 vehicles. Based on the company’s analysis of the small car market, the company believed that $16,000 was the equilibrium price based on the following supply and schedules.

 Price                     Amount Supplied      Amount Demanded

$12,000                        145,000                     215,000

$14,000                        160,000                     195,000

$16,000                        175,000                     175,000

$18,000                        190,000                     160,000

$20,000                        205,000                     150,000

$22,000                        220,000                     135,000

As the price of gasoline rose through the summer and fall of 2005, Toyota revised its estimate of the amount of product demanded. At each of the above price points, they estimate that consumers will purchase 30,000 more autos. For instance, at $16,000, now 205,000 cars will be sold. The price/amount supplied relationship remains the same.

  1. Describe what has happened to the supply and demand curves for Toyota automobiles.
  • What is the new equilibrium price?
  • How many cars will be produced at the new equilibrium price?

Do you need help with this assignment or any other? We got you! Place your order and leave the rest to our experts.

Quality Guaranteed

Any Deadline

No Plagiarism