Answer to Question #203069 in Economics of Enterprise for Reanea Clarke

Question

     

Quantity Supplied (000 lb.)

MARKET

SUPPLY

(000 lb.)

PRICE OF

TOMATO

$

MARKET

DEMAND

(000 lb.)

FARMER

Q

FARMER

R

FARMER

Y

 

30

500

50

25

25

 

40

400

100

60

40

 

50

300

130

100

70

 

60

200

185

125

90

 

70

100

220

180

100

 

 

Answer 1

Missing part of the question: What is the equilibrium price and quantity

Solution

Equilibrium is achieved at a point where quantity demanded is equal to quantity supplied. i.e. At equilibrium,

$Qd=Qs$

therefore,

equilibrium price = 50

equilibrium quantity=300