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    Analyzing demand and supply functions for tomato

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    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.

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    Solution Preview

    Please refer attached file for complete solution. Graphs will be missing below.

    Solution:

    A. Plot the demand and supply functions on the axis below
    P Qd=6000-4000P Qs=-1000+10000P
    0.1 5600 0
    0.3 4800 2000
    0.5 4000 4000
    0.6 3600 5000

    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 ...

    Solution Summary

    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.

    $2.49

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