Supply and Demand for Skateboards
|Price||Quantity Demanded||Quantity Supplied|
At equilibrium, quantity demanded is equal to quantity supplied.
Qd = Qs
Let us suppose the following to be the demand and supply function respectively-
Qd = a – bP
Qs = a + bP
Qd = Qs
115-0.1P = 20+0.2P
P = 32
Qd= 115 – 0.1 (32) = 112 [approx.]
Qs= 20 + 0.2 (32) = 26 [approx.]
Ans- Following is the diagram
The enclosed area represented by Op*q* is the market for skateboards.
= 20 + 0.2 
Qd = 115-0.1P
= 115 – 0.1 
With price being fixed at $500, the price is on the higher side of the chart, so the demand will fall and the supply will be in excess. Therefore, it is a case of surpus.
Ans- The demand curve would shift to the right.
Right shift in a demand curve is indicative of increase in quantity demanded because of other than price factors. In this case, Donald Trump is a celebrity and if he will be photographed riding one of these skateboards outside the White House, the demand for the skateboard will increase. Economics therefore functions in this particular way.