Analyzing demand and supply functions for tomato
Demand and supply functions of tomato are given below:
Qd = 6,000 - 4,000P
Qs= -1000 + 10,000P
A. Plot the demand and supply functions on the axis below
B. At a price of $ 1.0 per tomato,.......... tomatoes is the maximum amount that can be sold. A price of $......... per tomato is the maximum price that consumers will pay for 2,000 tomatoes, which is the demand price for 2,000 tomatoes.
C. The maximum amount of tomatoes that producers will offer for sale if the price of tomatoes is $ 0.30 is...........? the minimum price necessary to induce producers to offer voluntarily 2,000 tomatoes for sale is $........?, which is called the supply price for 2,000 tomatoes.
d. In equilibrium, the price of tomatoes is $.......? and ........? tomatoes will be soled.
E. In equilibrium, the quantity of tomatoes produced is ........ ?tomatoes.
f. In equilibrium the quantity of tomatoes consumed is........? tomatoes.
g. Are your answers to part e and f the same? why or why not
h. Congress imposes a $0.30 per tomato ceiling price on freaking tomatoes. this results in a ........... (surplus, shortage)? of ........ ?tomatoes.
Solution describes the steps for calculating equilibrium price and quantity of tomato. It also analyzes the behaviour of demand and supply functions in various given situations. At last, effect of ceiling price on demand and supply scenarion is discussed.
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