Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 3 - Demand, Supply, and Market Equilibrium - Problems - Page 74: 3

Answer

Part a) Equilibrium price is 4 Part b) Check graph in working Equilibrium price = 4 Equilibrium quantity = 75 thousand Part c) At Price = 3.40, shortage of 13 thousand bushels At Price = 4.90, Surplus of 21 thousand bushels At Price = 60 cents higher than the equilibrium price, Surplus of 14 thousand bushels At Price = 30 cents lower than the equilibrium price, shortage of 7 thousand bushels
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Work Step by Step

Part a) Shortage/Surplus = 0 at price = 4 Part b) Plot the graph using the points given in the textbook, and the point where both the demand curve and the supply curve meets is the equilibrium price and quantity Part c) At Price = 3.40, 72 - 85 = -13 At Price = 4.90, 81-60 = 21 At Price = 4-0.3 = 3.70, 73-80 = -7 At Price = 4+0.6 = 4.60 = 79-65 = 14
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