Suppose the total demand for wheat and the total supply of wheat per month in the Kansas City grain market are as follows: Thousands Price Thousand of bushels of bushels per bushel demanded supplied 72 85 $3.40 80 3.70 73 75 4.00 75 70 4.30 77 65 4.60 79 60 4.90 81 a. What is the equilibrium price? (_$ the surplus-shortage column. Now use it to explain why your answers are correct: ) What is the equilibrium quantity? L ) Fill in At the immediately lower price of $3.70, there is a ( shortage, surplus ) of ( At the immediately higher price of $4.30, there is a ( shortage, surplus ) of ( ) bushels. ) bushels. b. (exrtra pts) Graph the demand for wheat and the supply of wheat. Rough one is good. Be sure to label the axes of your graph correctly. Label equilibrium price P and the equilibrium quantity Q. c. Why will $3.40 not be the equilibrium price in this market? Why P0?

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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14.
Suppose the total demand for wheat and the total
supply of wheat per month in the Kansas City grain market are as follows:
Thousands
Price
Thousand
of bushels
supplied
72
of bushels
per
demanded
bushel
85
$3.40
80
3.70
73
75
4.00
75
70
4.30
77
65
4.60
79
60
4.90
81
a. What is the equilibrium price? ($
the surplus-shortage column. Now use it to explain why your answers are correct:
) What is the equilibrium quantity?
Fill in
At the immediately lower price of $3.70, there is a (shortage, surplus ) of (
At the immediately higher price of $4.30, there is a (shortage, surplus ) of (
) bushels.
) bushels.
b. (exrtra pts) Graph the demand for wheat and the supply of wheat. Rough one is good. Be sure to
label the axes of your graph correctly. Label equilibrium price P and the equilibrium quantity Q.
c. Why will $3.40 not be the equilibrium price in this market? Why
0?
Transcribed Image Text:14. Suppose the total demand for wheat and the total supply of wheat per month in the Kansas City grain market are as follows: Thousands Price Thousand of bushels supplied 72 of bushels per demanded bushel 85 $3.40 80 3.70 73 75 4.00 75 70 4.30 77 65 4.60 79 60 4.90 81 a. What is the equilibrium price? ($ the surplus-shortage column. Now use it to explain why your answers are correct: ) What is the equilibrium quantity? Fill in At the immediately lower price of $3.70, there is a (shortage, surplus ) of ( At the immediately higher price of $4.30, there is a (shortage, surplus ) of ( ) bushels. ) bushels. b. (exrtra pts) Graph the demand for wheat and the supply of wheat. Rough one is good. Be sure to label the axes of your graph correctly. Label equilibrium price P and the equilibrium quantity Q. c. Why will $3.40 not be the equilibrium price in this market? Why 0?
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