1. As an agriculture analyst for the Union of American Fruit Producers (UAFP), you are in charge of monitoring the USpeach market. The market can be described by the following "calibrated" demand and supply functions:Qd = 1600-8P +8PnQs = 34P-102(1)(2)where P is the price of a crate of peaches, Pn is the price for a crate of nectarines, and Qd and Q, are the quantitydemanded and the quantity supplied of peaches (measured in thousands of crates).(a) Find the inverse demand and inverse supply equations. Hypothetically, how many crates of peaches should UAFP expectconsumers to buy if peaches are given away free of charge in a marketing campaign? If the price of a crate of peacheswas to increase, at what price would buyers no longer be willing to buy any peaches? (Hint: your previous answers willbe expressions that depend on the value of P) If the price of peaches was to decrease, at what price would the quantityof peaches supplied fall to zero?(b) Assuming that P₁ = $55, graph the market supply and demand for peaches on a clearly labeled graph. Calculate and graphthe equilibrium price (P*) and quantity (Q*) for the market.(c) Using calculus, find an expression for the impact of a small price change of a crate of nectarines on the quantity demand ofpeaches (Note: we are asking only for a characterization of demand, not a change in the equilibrium price). Give an intuitiveinterpretation of your numerical result (no more than two sentences).(d) This year the beginning of the nectarine growing season was adversely impacted by unusually hot and dry weather. Thishas reduced the supply of nectarines, causing their price to rise dramatically (P₁ = $76). Since peaches weren't impactedby this weather, peach producers are ecstatic because they think higher priced nectarines will significantly raise the pricepeaches. Calculate the new equilibrium price (P**) and quantity (Q**) for peaches. Illustrate the changes on your graphfrom part (a). Are the peaches producers right?

Demand is amount of a good that consumers are willing and able to purchase at different…

1. As an agriculture analyst for the Union of American Fruit Producers (UAFP), you are in charge of monitoring the US peach market. The market can be described by the following "calibrated" demand and supply functions: Qd = 1600-8P +8Pn Qs =34P-102 (1) (2) where P is the price of a crate of peaches, Pn is the price for a crate of nectarines, and Qd and Q, are the quantity demanded and the quantity supplied of peaches (measured in thousands of crates). (a) Find the inverse demand and inverse supply equations. Hypothetically, how many crates of peaches should UAFP expect consumers to buy if peaches are given away free of charge in a marketing campaign? If the price of a crate of peaches was to increase, at what price would buyers no longer be willing to buy any peaches? (Hint: your previous answers will be expressions that depend on the value of Pn) If the price of peaches was to decrease, at what price would the quantity of peaches supplied fall to zero? (b) Assuming that P = $55, graph the market supply and demand for peaches on a clearly labeled graph. Calculate and graph the equilibrium price (P*) and quantity (Q*) for the market. (c) Using calculus, find an expression for the impact of a small price change of a crate of nectarines on the quantity demand of peaches (Note: we are asking only for a characterization of demand, not a change in the equilibrium price). Give an intuitive interpretation of your numerical result (no more than two sentences). (d) This year the beginning of the nectarine growing season was adversely impacted by unusually hot and dry weather. This has reduced the supply of nectarines, causing their price to rise dramatically (P = $76). Since peaches weren't impacted by this weather, peach producers are ecstatic because they think higher priced nectarines will significantly raise the price peaches. Calculate the new equilibrium price (P**) and quantity (Q**) for peaches. Illustrate the changes on your graph from part (a). Are the peaches producers right?