The following table is a demand and a supply schedule for pens.

Price
AED
Quantity
Demanded
Per day
Quantity
Supplied
Per day
1
28
4
2
24
8
3
20
12
4
16
16
5
12
20

Using the table above, respond to the following:

1. Plot the demand and supply curves for the pens market and label the axis and each curve. On the graph show the equilibrium point. (2 marks)
2. Determine the equilibrium price and quantity (1 mark)

3. At the equilibrium price, is there a surplus or shortage and how much is it. (1 mark)

4. At price AED 3, describe the situation of the market and show it on the figure. (1 mark)

5. From question 4 above, how much is this surplus or shortage? (0.5 marks)

6. In this case, will the price increase or decrease? (0.5 marks)