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Demand and supply relationships

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The following equations describe the demand and supply relationships for fragles:
Qd = 189 -2.25P
Qs = 124 + 1.5P

a. What is the equilibrium price and quantity?
b. The Agriculture Department sets a minimum price of $25.00 a pound. Will there be a surplus or a shortage? What will be the quantity demanded and the quantity supplied at this new price?

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The expert examines demand and supply relationships.

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The following equations describe the demand and supply relationships for fragles:
Qd = 189 -2.25P
Qs = 124 + 1.5P

a. What is the equilibrium price ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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