

Explanation of Solution
The
The supply function of corn is shown below:
To calculate the equilibrium price, equate the
The equilibrium price is $4.
Substitute the price ($4) in supply function to calculate the quantity of corn that can be bought and sold.
The quantity of corn that can be bought and sold is 11 units.
If the fuel price increases to $4.50 per gallon, the price corn will increase to $4.50. The quantity supply of corn is calculated as follows:
Price is $4.5.
Substitute this $4.5 to quantity supply.
The quantity supplied is 10 units.
Demand: Demand refers to the total value of goods and services produced in an economy during a period of time at particular price.
Supply: Supply is defined as the quantity of a commodity offered for sale at particular price during a period of time.
Equilibrium price and quantity: The intersecting point of demand and supply curve is the equilibrium point. The corresponding price and quantity of equilibrium points are the equilibrium price and
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Chapter 2 Solutions
Microeconomics
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