The supply and demand functions for maize farmers are given as Qs = - 32 + 10P and Qd = 40 – 2P respectively where Qs is quantity supplied in bags, Qd is quantity demanded in bags and P is the price per bag in Ghana Cedis. (a) Determine the equilibrium price and quantity of maize. (b) As a result of the introduction of a new technology in maize farming, the supply function for maize changes to become Qs = - 20 + 10P. Demand remains unchanged. i. Determine the new equilibrium price and quantity. ii. Derive the supply and demand table for maize before and after the introduction of the new technology for price ranges 3, 4, 5, 6, 7 and 8. (c) Suppose government intervenes in the maize market and fixes a minimum price of GHC8 per bag after the introduction of the new technology. i. What happens in the maize market? ii. Give two (2) measures that the government can take to deal with the situation created by the minimum price in (c) i. above
The
(a) Determine the
(b) As a result of the introduction of a new technology in maize farming, the supply function for maize changes to become Qs = - 20 + 10P. Demand remains unchanged.
i. Determine the new equilibrium price and quantity.
ii. Derive the supply and demand table for maize before and after the introduction of the new technology for price ranges 3, 4, 5, 6, 7 and 8.
(c) Suppose government intervenes in the maize market and fixes a minimum price of GHC8 per bag after the introduction of the new technology.
i. What happens in the maize market?
ii. Give two (2) measures that the government can take to deal with the situation created by the minimum price in (c) i. above
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