The following table shows the market demand and supply information ( in tons) at different prices for wheat production in India. Price ($) Demand (T) Supply (T) 1.2 80 35 1.7 78 40 2.2 65 65 2.7 50 55 3.2 33 65 3.7 20 75 4.2 18 100 a) According to the above information, what is the price elasticity of demand if the market price got down from 3.7$ to 2.2$ (calculate using the midpoint formula) b) What type of elastic product is wheat in India and what will affect total revenue if wat producers decided to increase the price? c) What are the market equilibrium price and quantity? d) Assume the wheat production reduce by 5 tonnes due to bad weather patterns and then what is the new market equilibrium price and quantity?
The following table shows the market demand and supply information ( in tons) at different prices for wheat production in India. Price ($) Demand (T) Supply (T) 1.2 80 35 1.7 78 40 2.2 65 65 2.7 50 55 3.2 33 65 3.7 20 75 4.2 18 100 a) According to the above information, what is the price elasticity of demand if the market price got down from 3.7$ to 2.2$ (calculate using the midpoint formula) b) What type of elastic product is wheat in India and what will affect total revenue if wat producers decided to increase the price? c) What are the market equilibrium price and quantity? d) Assume the wheat production reduce by 5 tonnes due to bad weather patterns and then what is the new market equilibrium price and quantity?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
The following table shows the market
|
|
Demand (T) |
Supply (T) |
|
1.2 |
80 |
35 |
|
1.7 |
78 |
40 |
|
2.2 |
65 |
65 |
|
2.7 |
50 |
55 |
|
3.2 |
33 |
65 |
|
3.7 |
20 |
75 |
|
4.2 |
18 |
100 |
a) According to the above information, what is the
b) What type of elastic product is wheat in India and what will affect total revenue if wat producers decided to increase the price?
c) What are the
d) Assume the wheat production reduce by 5 tonnes due to bad weather patterns and then what is the new market equilibrium price and quantity?
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