Part 1: Spatial EquilibriumThe demand in market 1 is D₁ = 24 - P₁The supply in market 1 is S₁ = -2 + P₁The demand in market 2 is D₂ = 16 - P21.Name:The supply in market 2 is S₂ = 2 + P₂If no trade occurs between the markets, what are the equilibrium values of D1, S1,P1, D2, S2, and P2? Solve algebraically.2.AG BM 102Lesson 11 Homework3.If the cost of transportation between the two markets is PT = 2, what would be theequilibrium values of D₁, S₁, P1, D2, S2, P2, QT, and PT? Solve algebraically.Show the above situation graphically, both with and without trade. Please labeleverything.[Insert an image of your graph here]Part 2: Storage EquilibriumAssume that the market supply curve for potatoes is Qs₁ = 12 + 0.5P, and that there aretwo marketing periods for the crop. In the first marketing period the demand curve is:QD1 = 24-P₁, in the second period it is: QD2= 18 - P2.1. Draw a graph of the markets in the two periods showing prices and quantities if itcosts nothing to store potatoes. Be sure to label all the relevant features on yourgraph.[Insert an image of your graph here]2. Show the prices and quantities in each period if it costs $5 per cwt. to storepotatoes for delivery in the second marketing period. Again, be sure to label allrelevant features on your graph (s).[Insert an image of your graph here]3. By comparing the results for 5 and 6 above explain how the cost of storageaffects prices and quantities in each period.1

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1. 2. 3. If no trade occurs between the markets, what are the equilibrium values of D₁, S1, P1, D2, S2, and P2? Solve algebraically. If the cost of transportation between the two markets is PT = 2, what would be the equilibrium values of D₁, S₁, P1, D2, S2, P2, QT, and PT? Solve algebraically. Show the above situation graphically, both with and without trade. Please label everything.

1. 2. 3. If no trade occurs between the markets, what are the equilibrium values of D₁, S1, P1, D2, S2, and P2? Solve algebraically. If the cost of transportation between the two markets is PT = 2, what would be the equilibrium values of D₁, S₁, P1, D2, S2, P2, QT, and PT? Solve algebraically. Show the above situation graphically, both with and without trade. Please label everything.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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