- Market equilibrium is reached when the quantity supplied matches the quantity demanded (\(Q_s = Q_d\)).
- We examined the given data for each price level to find where these quantities intersect.
- At the price of \(\$400\), we observe that \(Q_s = 300\) and \(Q_d = 300\), confirming this as the equilibrium price.
- Thus, the equilibrium price is \(\boxed{\text{A}}\).
Explanation
- Understanding Market Equilibrium
Market equilibrium occurs in a market when the quantity supplied of a product matches the quantity demanded at a specific price point. At this point, the market clears, meaning there is neither a surplus (when quantity supplied exceeds quantity demanded) nor a shortage (when quantity demanded exceeds quantity supplied). We are given a supply schedule and a demand schedule for laptops at five different price points: \(\$300\), \(\$400\), \(\$500\), \(\$600\), and \(\$700\). Our goal is to identify the equilibrium price by finding the price level where the quantity supplied equals the quantity demanded (\(Q_s = Q_d\)).
- Analyzing the Data Schedules
We systematically compare the quantity supplied (\(Q_s\)) and quantity demanded (\(Q_d\)) for each price level provided:
- At \(\$300\): \(Q_s = 100\) and \(Q_d = 450\). Since \(100
eq 450\), this is not equilibrium.
- At \(\$400\): \(Q_s = 300\) and \(Q_d = 300\). Here, \(Q_s = Q_d = 300\). This matches the condition for market equilibrium.
- At \(\$500\): \(Q_s = 500\) and \(Q_d = 200\). Since \(500
eq 200\), this is not equilibrium.
- At \(\$600\): \(Q_s = 700\) and \(Q_d = 150\). Since \(700
eq 150\), this is not equilibrium.
- At \(\$700\): \(Q_s = 900\) and \(Q_d = 125\). Since \(900
eq 125\), this is not equilibrium.
- Conclusion and Final Answer
Based on the evaluation of the provided data, we have identified that at a price of \(\$400\), the quantity supplied is exactly equal to the quantity demanded, both being \(300\) units. This means the market is in equilibrium at this price point. Comparing this to the given options, we find that option A represents the equilibrium price. Therefore, the seller would charge \(\$400\) for the laptops to meet the equilibrium condition. The final answer is \(\boxed{\text{A}}\).
Examples
In a real-world setting, market equilibrium is essential for businesses to set prices that maximize their sales without leaving unsold inventory or having customers walk away disappointed. For example, a bakery uses similar supply and demand data to determine the price of their bread. If they set the price too high, they may end up with many loaves left at the end of the day; if they set it too low, they may run out of bread quickly, missing out on potential revenue. Finding the equilibrium price allows them to efficiently match the amount they produce with the number of customers willing to buy it at that price.