QuantityQuantity Price per Demanded Supplied (bushels)(bushels) S3 0,000 6,000 2
ID: 1162497 • Letter: Q
Question
QuantityQuantity Price per Demanded Supplied (bushels)(bushels) S3 0,000 6,000 2.000 18,000 15,000 12.000 8,000 4,000 0 4,000 9,000 12.000 15,000 22.000 28,000 36,000 12 15 21 24 3. Refer to table above. The table contains information about the corn market. Use the table to answer the following questions. a.What are the equilibrium price and quantity of corn? b. Suppose the prevailing price is S9 per bushel. Is there a shortage or a surplus in the market? c.What is the quantity of the shortage or surplus? d.How many bushels will be sold if the market price is $9 per bushel? e. If the market price is S9 per bushel, what must happen to restore equilibrium in the market? f. At what price will suppliers be able to sell 22,000 bushels of corn? g. Suppose the market price is S21 per bushel. Is there a shortage or a surplus in the market? h. What is the quantity of the shortage or surplus? i. How many bushels will be sold if the market price is $21 per bushel? j. If the market price is $21 per bushel, what must happen to restore equilibrium in the market?Explanation / Answer
Req a: The equilibrium price: $ 15 Equillibrium qty: 15000nushels This is at the point where the demand and supply is equal i.e. at price of $15. Req b: At price of $9. demand exceeds supply. Hence there is shortage of goods. Req c: demand: 22000 Supply: 9000 Shortage = 22000-9000 =13000 bushels Req d: The number of bushels sold will be 9000 bushels Req e: As the demand exceeds supply, there is a upward pressure on the price. And the price will increase to $15 i.e. to equilibrium price to restore the equilibrium. Req f: No supplier could not be able to sell 22000 bushels. Req g: At price $21, supply exceeds demand. Hence, there is surplus goods. Req h: Demand: 8000 bushels Supply: 28000 bushels Surplus: 28000 - 8000 =20000 bushels Reg i. The supplier could be able to sell 8000 bushels Req j: As the supply is more than demand, there is a surplus in the market. Therefore, there is downward pressure on the price and the price is bound to fall to restore at an equilibrium price of $ 15.