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What is the equilibrium price?  At what price is there neither a shortage nor a surplus? Fill in the surplus-shortage column and use it to confirm your answers.Graph the demand for wheat and the supply for wheat.  Be sure to label the axes of your graph correctly.  Label equilibrium price P and equilibrium quantity Q.How big is the surplus or shortage at $3.40?  At 4.90?  How big a surplus or shortage results if the price is 60 cents lower than the equilibrium price?Thousands                                  Thousands                    Surplus (+)         of Bushels            Price per         of Bushels                          ordemanded           Bushel             Supplied                        Shortage (-)85                         $3.40                   72                                ___________80                           3.70                   73                                ___________75                          4.00                    75                               ___________70                           4.30                   77                               ___________65                          4.60                    79                               ___________60                          4.90                    81                               __________

Question
  • What is the equilibrium price?  At what price is there neither a shortage nor a surplus? Fill in the surplus-shortage column and use it to confirm your answers.
  • Graph the demand for wheat and the supply for wheat.  Be sure to label the axes of your graph correctly.  Label equilibrium price P and equilibrium quantity Q.
  • How big is the surplus or shortage at $3.40?  At 4.90?  How big a surplus or shortage results if the price is 60 cents lower than the equilibrium price?

Thousands                                  Thousands                    Surplus (+)         

of Bushels            Price per         of Bushels                          or

demanded           Bushel             Supplied                        Shortage (-)

85                         $3.40                   72                                ___________

80                           3.70                   73                                ___________

75                          4.00                    75                               ___________

70                           4.30                   77                               ___________

65                          4.60                    79                               ___________

60                          4.90                    81                               __________

 

check_circleAnswer
Step 1

Equilibrium exists when the quantity demanded is equal to the quantity supplied in an economy. There is neither surplus nor shortage at price $4.00 because at this price the quantity demanded is equal to the quantity supplied.

Surplus occurs when quantity supplied exceed quantity demanded and shortage exists when quantity demanded exceeds quantity supplied.

The surplus-shortage column is shown below:

Thousands of Bushels
Price
Thousands of Bushels
Surplus or Shortage
Demanded
Supplied
3.40
85
72
-13
3.70
80
73
-7
75
4.00
75
0
70
4.30
77
7
4.60
65
79
14
81
60
4.90
21
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Image Transcriptionclose

Thousands of Bushels Price Thousands of Bushels Surplus or Shortage Demanded Supplied 3.40 85 72 -13 3.70 80 73 -7 75 4.00 75 0 70 4.30 77 7 4.60 65 79 14 81 60 4.90 21

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Step 2

The graphical representati...

Price
4.90
4.60
4.30
Equilibrium Price- 4.00
3,70
3.40
0
60 63
69 72 75 788184 87 Quantity Demanded
and Quantity Supplied
66
Equilibrium Quantity
99
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Image Transcriptionclose

Price 4.90 4.60 4.30 Equilibrium Price- 4.00 3,70 3.40 0 60 63 69 72 75 788184 87 Quantity Demanded and Quantity Supplied 66 Equilibrium Quantity 99

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