Microeconomics
Microeconomics
10th Edition
ISBN: 9781259655500
Author: David C Colander
Publisher: McGraw-Hill Education
Question
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Chapter 5.A, Problem 5QE

a)

To determine

The equilibrium price and quantity of wheat.

b)

To determine

The effects of a government set price of $5.

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Find the equilibrium price and quantity for a product that has the following supply and demand curves, where p is the price in 100's of dollars and q is quantities in 1,000's of units demand: 1/3q + 1/3p - 4=0 Supply: q-p-2=0 If the product is currently priced at $400, what is the quantity supplied and the quantity demanded? Is there a surplus (More supplied than demanded) or a shortage (More demanded than supplied)
Assume that we are looking at the market for snowblowers in December. The initial equilibrium is at a price of $500 and quantities of 1,000. Assume that December begins with three massive blizzards, how might this impact the snowblower market?  Demand will shift to the right, causing a surplus, which causes prices to increase until we end up with higher prices and a greater quantity.   Demand will shift to the right, causing a shortage, which causes prices to increase until we end up with higher prices and a lessor quantity.  Demand will shift to the right, causing a shortage, which causes prices to increase until we end up with higher prices and a greater quantity.  Demand will shift to the right, causing a shortage, which causes prices to decrease until we end up with higher prices and a greater quantity.
Suppose the price of gasoline is $1.60 per gallon. Is the quantity demanded higher or lower than at the equilibrium price of $1.40 per gallon? What about the quantity supplied? Is there a shortage or a surplus in the market? If so, how much?
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