Question
Asked Sep 20, 2019
1163 views

Instructions: Enter your answers as whole numbers. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.

 
 
Thousands of Bushels Demanded Price per Bushel Thousands of Bushels Supplied Surplus (+) or Shortage (-)
88 $3.40 65  
81 3.70 71  
75 4.00 75  
70 4.30 78  
66 4.60 80  
63 4.90 81  

a. What is the equilibrium price in this market?

 

    

 

At what price is there neither a shortage nor a surplus?

 

b. Graph the demand for wheat and the supply of wheat. Be sure to locate the equilibrium price and quantity.

 

Instructions: Enter all numeric values without a minus sign.

 

c. How big is the surplus or shortage at $3.40?

   There is a

of

  

 



 
  How big is the surplus or shortage at $4.90?

  There is a

of

 

 



d. How big a surplus or shortage results if the price is 60 cents higher than the equilibrium price?

 

 

 

 

e. How big a surplus or shortage results if the price is 30 cents lower than the equilibrium price?

 

 

 

 

Instructlons: Use the tools provided 'Supply' and 'Demand' to draw the demand and supply curves using the data in the table. Include
each price-quantity combination. Each line should contaln 6 reference polnts. Then use the tool provided 'Eq' to Identify the
equilibrlum price and quantity.
Market for Wheat
Tools
5.5
5.0
Demand
Supply
4.5
Eq
4.0
3.5
3.0
55
60
65
70
75
80
85
90
Quantity (thousands of bushels)
Price (per bushel)
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Instructlons: Use the tools provided 'Supply' and 'Demand' to draw the demand and supply curves using the data in the table. Include each price-quantity combination. Each line should contaln 6 reference polnts. Then use the tool provided 'Eq' to Identify the equilibrlum price and quantity. Market for Wheat Tools 5.5 5.0 Demand Supply 4.5 Eq 4.0 3.5 3.0 55 60 65 70 75 80 85 90 Quantity (thousands of bushels) Price (per bushel)

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Expert Answer

Step 1

(a) Equilibrium price (P) corresponds to the price such that quantity demanded is exactly equal to the quantity supplied. $4.00 is the equilibrium price where quantity demanded and quantity supplied are the same that is 75 thousand bushels and leads to a situation of clear market. Equilibrium price corresponding to $4 is the price where there is neither a situation of excess demand nor a situation of excess supply in the market. that is market is being balanced at the equilibrium price.

Step 2

(b) Graph of the demand and supply of curve is given below where the downward sloping red curve is demand curve and upward sloping blue curve is supply curve.

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90 85 80 75 70 - supply 65 -demand 60 55 50 $3.40 $3.70 $4.00 $4.30 $4.60 $4.90 price quantity

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Step 3

(c) surplus arises when demand is less than the supply at a specific price and shortage arises when quantity demanded is greater than supply. At price $3.40 there...

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Supply and Demand

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