Assignment 3: Demand and Supply

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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

$18400010,000
1650009500
1460009000
1270008500
1080008000
990007500
8100007000
7110006500
6120006000
5130005500
4140005000
2150004500

Questions:

  1. Construct a graph showing supply and demand in the E-Book market, using Excel.
  2. How are the Laws of Supply and Demand illustrated in this graph?  Explain your answers.
  3. What is the equilibrium price and quantity in this market?
  4. Assume that the government imposes a price floor of $12 in the E-Book market.  What would happen in this market?
  5. Assume that the price floor is removed and a price ceiling is imposed at $6.  What would happen in this market?
  6. Now assume that the price of E-Readers (used with E-Books) drops by fifty percent. How would this change impact the demand for E-Books? Explain your answer and reconstruct the graph developed in question one to show this change. 

Present your analysis in Excel format. Enter non-numerical responses in the same worksheet using textboxes.

If you want to learn how to use Microsoft Excel to create curves, refer to the MS Excel tutorials placed.

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