i. Supply and demand curve for bicycles.

a.

ii. As per the graph the equilibrium quantity is 50 and the price that shows a point of

equilibrium is $300. At this point, the powers of demand and supply are equal.

iii. If there is an increase occurs in both demand and supply, the equilibrium price will rise

higher than 300. An increase in equilibrium price and quantity shows that the demand for

a product increased with an increase in their prices. The equilibrium price will also

increase and become more significant than 50, which is the current. Both the equilibrium

price and quantity would increase in the same proportions.

iv. If the demand for bicycles increases more than the supply, it will create an economic

condition called excess demand. The equilibrium price would thus increase to more

proportion than the supply of the bikes. Suppose an equal increase in both EQ and EP

were $400 and 60 respectively, the new rates would thus be $500 and 62. This shows a

small increase in the equilibrium quantity than the equilibrium price.

 Reference.

Leoni, B., & Epstein, R. A. (2017). The Problem of Economic Calculation in a Planned

Economy. In Law, Liberty, and the Competitive Market (pp. 39-82). Routledge.