(a)
The individual supply curve.
(a)
Explanation of Solution
It is given the marginal cost of rainy season growers is
The quantity supplied by each almond grower is the quantity at which the price is equal to the marginal cost.
The quantity supplied by rainy area growers can be calculated as follows:
Thus, the quantity supplied by rainy area growers is
The quantity supplied by dry area growers can be calculated as follows:
Thus, the quantity supplied by dry area growers is
Supply: Supply is defined as the quantity of a commodity offered for sale at different market prices.
(b)
The market supply.
(b)
Explanation of Solution
The
Thus, the market supply is 32,500P.
Supply: Supply is defined as the quantity of a commodity offered for sale at different market prices.
(c)
The
(c)
Explanation of Solution
When the market is in equilibrium, the market demand is equal to the market supply.
It is given that the market demand is
The equilibrium price in the market is $3.
Substituting the value of price in the demand function, the quantity demanded at equilibrium can be calculated as follows:
Thus, the
Supply: Supply is defined as the quantity of a commodity offered for sale at different market prices.
(d)
The quantity of almonds produced.
(d)
Explanation of Solution
The total quantity of almonds produced by rainy area growers is as follows:
The total quantity of almonds produced by rainy area growers is 75,000 crates.
The total quantity of almonds produced by dry area growers is as follows:
The total quantity of almonds produced by dry area growers is 22,500 crates.
(e)
Whether the total production of all almond growers is equal to the market supply.
(e)
Explanation of Solution
The total quantity of almond produced by all almond growers is calculated as follows:
Thus, the total quantity of almonds supplied by all almond growers is 97,500. This is equal to the market supply obtained in part (c).
Supply: Supply is defined as the quantity of a commodity offered for sale at different market prices.
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Chapter 8 Solutions
Microeconomics
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