Answer to Question #235798 in Microeconomics for Daakyehene

Question

Suppose the market for corn in Ghana is described by the following demand and supply

equations:

Demand: P = 100 – (1/2)Q

Supply: P = 10 + (13/10)Q.

 Where, P is price(₵/bag); and, Q is quantity(bags). Use this information to answer the

following questions.

a. What is the equilibrium price and quantity of corn in this market?

b. Plot the demand and supply of corn and show the intercept values, equilibrium quantity

and price.

c. What is the total revenue derived in this market?

Answer 1

a)

$P = 100 – \frac{1}{2}Q\\ P = 10 + \frac{13}{10}Q.\\100 – \frac{1}{2}Q = 10 + \frac{13}{10}Q.\\90=1.3Q+0.5Q\\90=1.8Q\\Q=50\\P=100-0.5(50)\\=100-25\\=75$

b)

c)

$Total\space revenue=price×quantity\\=75×50\\=3750$