Combined Results

We have examined separately the results of our analyses of booth buyers and sellers, but now it is now time to bring the two pieces together. A place to start would be the table and graphs below containing the results of the initial surveys. The first three columns you have seen before while the fourth is simply the difference between what is demanded and what is supplied at every price (excess demand).

If we look at the situation if the tuition were $6,000, we find that there would be 17,300 people looking for slots at the university while the university would make 16,600 slots. At this price there would be a shortage as a result of excess demand for the slots.

Similarly, at a price of $24,000, the university is willing to make 20,200 slots available while only 13,100 slots are being sought. Here we would say we were experiencing a surplus of 7,100 slots as a result of excess supply.

Survey Results

At neither of these prices are we likely to find an equilibrium, a price at which the number of individuals seeking acceptance would just equal the number of slots being made available. There would be neither a shortage nor surplus. From the table we can see that somewhere between $6,000 and $9,000 we will find the equilibrium.

But what does this look like graphically? We find the same information, it just looks a bit different. At a price of $15,000, we find that there is a surplus. The equilibrium exists where the two curves intersect. At this point we just check out the values for price and applications.

You are now ready to move onward. We now have a model that explains prices, so let us use it to explain past and/or forecast future price changes. If you are interested, let's continue.