Question

Use the table below for strawberry jam in the US to answer the following questions

Price $	Quantity demand in jars	Quantity supplied in jars
5	10 million	6 million
6	9 million	7 million
7	8 million	8 million
8	7 million	9 million
9	6 million	10 million

1. What is the equilibrium price and quantity in the US?
2. If the world price is $5 will the US import or export strawberry jam?

1. How many jars will the US produce and how many will be exported or imported?
2. Who will benefit US producers or US consumers?

3. If the world price is $8 will the US import or export?

1. How many jars will the US either import or export?
2. Who will benefit US producers or US consumers?

Answer 1

Answer 1. Equilibrium Price= $7

Equilibrium Quantity= 8 million

reason- Equilibrium occurs where Qd= Qs

Answer 2. World price=$5

Since world price is less than equilibrium Price, US will import.

Answer 3. US will produce 6 million jars and Import 4 million jars.

reason-

Import= Qd-Qs= 10 million- 6 million= 4 million

Answer 4. US consumers benefits as now they can get more jars at cheaper rate than before.

Answer 5. World price=$8

Since world price is more than equilibrium Price, US will export.

Answer 6. US will export 2 million jars.

Export= Qs-Qd= 9 million- 7 million= 2 million jars.

Answer 7. US producers benefits as now they can sell more jars at higher rate than before.