ECONOMICS ASSIGNMENT

Question

Farmers in a country usually produced 100,000 bushels of soya beans per year at a market price of #50. The demand for this year is 150,000; this shortage led to a rise in price from #50 to #90. At this price, the demand and supply intersects. The number of unit sold at the new price was 125,000 bushels. What is the equilibrium price and units? Please show the demand and supply Schedule, curve and mathematical functions. Thanks.

Answer 1

We know two points on the supply curve right away. at a price of 50 Qs= 100,000 at a price of 90 Qs= 125,000. So the slope is ΔP/ΔQ_s = +40/+25,000 We know the old demand curve intersected the supply curve at p=50. We only have one point on the old demand curve so we can say nothing more than that point was on it. The new demand curve has Qd=150,000 when p=50 and Qd= 125,000 when p=90 so the slope of the demand curve = ΔP/ΔQd =+40/(-25,000). To Graph locate three points point a (100,000,50) point b is 125,000 and point c is (150,000,50). Draw a line connecting a and b and you have supply. draw a line connecting b and c and you have demand.

I am available for any economics course you may have.