Using the supply and demand functions below, derive the demand and supply curves if Y = $55,000 and p. =$7. What is the equilibrium price and quantity of coffee? The demand function for coffee is Q = 8.5 -p+0.01Y, where Q is the quantity of coffee in millions of pounds per year, p is the price of coffee in dollars per pound, and Y is the average annual household income in high-income countries in thousands of dollars. The coffee supply function is Q=9.6+0.5p - 0.2pc where p. is the price of cocoa in dollars per pound. The equilibrium price of coffee is p= S per pound and the equilibrium quantity is Q millions of pounds per year.
Using the supply and demand functions below, derive the demand and supply curves if Y = $55,000 and p. =$7. What is the equilibrium price and quantity of coffee? The demand function for coffee is Q = 8.5 -p+0.01Y, where Q is the quantity of coffee in millions of pounds per year, p is the price of coffee in dollars per pound, and Y is the average annual household income in high-income countries in thousands of dollars. The coffee supply function is Q=9.6+0.5p - 0.2pc where p. is the price of cocoa in dollars per pound. The equilibrium price of coffee is p= S per pound and the equilibrium quantity is Q millions of pounds per year.
Chapter5: Markets In Motion And Price Controls
Section: Chapter Questions
Problem 10P
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Transcribed Image Text:Using the supply and demand functions below, derive the demand and supply curves if Y = $55,000 and p, = $7. What is the equilibrium price and quantity of coffee?
The demand function for coffee is
Q = 8.5 -p+0.01Y,
where Q is the quantity of coffee in millions of pounds per year, p is the price of coffee in dollars per pound, and Y is the average annual household income in
high-income countries in thousands of dollars.
The coffee supply function is
Q = 9.6 + 0.5p -0.2pc,
where p, is the price of cocoa in dollars per pound.
The equilibrium price of coffee is
p= S
per pound
and the equilibrium quantity is
Q =
millions of pounds per year.
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