# Instructlons: Use the tools provided 'Supply' and 'Demand' to draw the demand and supply curves using the data in the table. Includeeach price-quantity combination. Each line should contaln 6 reference polnts. Then use the tool provided 'Eq' to Identify theequilibrlum price and quantity.Market for WheatTools5.55.0DemandSupply4.5Eq4.03.53.05560657075808590Quantity (thousands of bushels)Price (per bushel)

Question
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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?

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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.

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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