The market for rice has the following supply and demand schedule. -What is the equilibrium price and quantity? -Calculate the revenue at equilibrium. -Quantity supplied is reduced by 30 tonnes. Calculate the new quantity supplied. What is the new equilibrium price and quantity now? -Calculate the new revenue. Did it increase or decrease? Price ($) Quantity demanded (tonnes) Quantity supplied (tonnes) 2 110 50 4 95 65 6 80 80 8 65 95 10 50 110 12 35 125

The market for rice has the following supply and demand schedule. -What is the equilibrium price and quantity? -Calculate the revenue at equilibrium. -Quantity supplied is reduced by 30 tonnes. Calculate the new quantity supplied. What is the new equilibrium price and quantity now? -Calculate the new revenue. Did it increase or decrease? Price ($) Quantity demanded (tonnes) Quantity supplied (tonnes) 2 110 50 4 95 65 6 80 80 8 65 95 10 50 110 12 35 125

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 3TY

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1. Much of the demand for U.S. agricultural output comes from other countries. Suppose that the total demand for wheat in the U.S. wheat market is QDT = 3,244 – 283P, where P is the price measured in dollars per bushel and Q is the quantity of wheat expressed in millions of bushels per year. Of the total demand, total domestic demand was QD,US = 1,700 – 107P. Total supply of wheat in the U.S. market is QST = 1,944 + 207P. As a result of the ongoing trade war with China, suppose the export demand for wheat falls by 40 percent. a. U.S. farmers are concerned about this drop in export demand. How does this drop in export demand impact the market price of wheat in the U.S.? Do farmers have much reason to worry? Explain/support your answer. b. How does the reduction in export demand affect U.S. consumer surplus in the wheat market? Illustrate and explain. c. Now, suppose the U.S. government wants to buy enough wheat to raise the price to $3.50 per bushel. With the drop in export…
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