Question

joes shoe shop raises prices from the equilibrium price of $40 a pair to its new price of $60 a pair.

Answer 1

I think you’re referring to the competitive equilibrium price

Answer 2

Answer:

Since Joe's Shoe Shop increased their prices by 50% [= ($60 - $40) / $40], the quantity demanded by their customers will severely decrease resulting in in a supply surplus (or excess supply). An increase in the price of a product will increase the quantity supplied of the product but decrease the quantity demanded.