Question

1. [10 pts] Assume that the market demand and supply curves for soybeans grown in Canada

can be represented via the following:

Q_{D} = 40 − 0.5P_{s.} Q_{s} = 2.5 +
2.5P_{s}

where PS is the soybean price ($/bushel) and QS is the quantity of soybeans produced (denominated

in 100 million bushel units).

(a) [10 pts] What is the equilibrium price, P*_{s}, and
quantity, Q*_{s}, of soybeans?

Answer #1

Market equilibrium is the market situation where quantity demanded is equal to quantity supplied. (QD = QS) The corresponding price and quantity at market equilibrium is called equilibrium price and equilibrium quantity.

**At market equilibrium, QD =
QS**

(Equating the given QD and QS to find equilibrium price and quantity)

40 − 0.5Ps= 2.5 + 2.5Ps

40 – 2.5 = 2.5Ps + 0.5Ps

37.5 = 3Ps

Ps = 37.5/3 = 12.5

**Equilibrium price of soybean
(Ps) = $12.5**

Qs = 2.5 + 2.5Ps

(Substitute P = 12.5 to find equilibrium quantity)

Qs = 2.5 + (2.5 * 12.5)

Qs = 2.5 + 31.25

Qs = 33.75

**Equilibrium quantity of
soybean (Qs) = 33.75** (in 100 million-bushel units)

Recently, China placed tariffs on the importation of US
soybeans. Assume that the domestic market for soybeans in China is
described by the following equations: Demand: P = 11.5 – Q Supply:
P = 5.5 + Q Price is in 10 Yuan (¥) per bushel of soybeans and the
units for Quantity are 100 million bushels per year. This is to
make graphing simpler. This does NOT mean that the price is 10 and
quantity is 100. Rather it means...

China’s Domestic Supply and Demand for
soybeans per ton is:
QD = 700 –
P QS = 2P – 500
(2 pts.) The equilibrium P* = $_________ and Q* =
_______
(2 pts.) Draw the Supply and Demand curves on a
graph.
(2 pt.) Calculate CS (and show your
work) $_______________

The corn market is perfectly competitive, and the market supply
and demand curves are given by the following equation: Qd
=50,000,000 – 2,000,000 p Qs = 10,000,000 +5,500,000 p Where Qd and
Qs are quantity demanded and quantity supplied measured in bushels,
and P= price per bushel.
1) Determine consumer surplus at the equilibrium price and
quantity.

Suppose the global Soybean market is competitive and currently
has the following supply and demand functions: QD = 700
– 0.5PS and QS = PS – 500.
The market expects to see a 25% increase in the market price
within a year due to change in demand. What will be the new
equilibrium price and equilibrium quantity of the market keeping
all other things constant?
New P*= New Q*=

Suppose the market for corn is given by the following equations
for supply and demand:
QS = 2p − 2
QD = 13 − p
where Q is the quantity in millions of bushels per year and p is
the price.
Calculate the equilibrium price and quantity.
Sketch the supply and demand curves on a graph indicating the
equilibrium quantity and price.
Calculate the price-elasticity of demand and supply at the
equilibrium price/quantity.
The government judges the market...

Consider a market that can be represented by a linear demand
curve, QD = 200 – 2PD, (where QD is the quantity demanded and PD is
the price that demanders pay) and a linear supply curve that QS = ½
PS (where QS is the quantity supplied and PS is the price that
suppliers get).
a. What is the equilibrium price?
b. What is the equilibrium quantity?
c. What is demand elasticity at the equilibrium point?

1: Assume that demand for a commodity is represented by the
equation P = 10 – 0.2 Q d, and supply by the equation P = 5+ 0.2 Qs
where Qd and Q s are quantity demanded and quantity supplied,
respectively, and P is the Price. Use the equilibrium condition Qs
= Qd 1: Solve the equations to determine equilibrium price.
2: Now determine equilibrium quantity.
3: Graph the two equations to substantiate your answers and
label these two graphs...

1. Demand and supply curves can be represented with equations.
If Qd = 90 - 2P and Qs = P, then equilibrium price P* and
equilibrium quantity Q* are
a. P* = 30, Q* = 60
b. P* = 60, Q* = 30
c. P* = 30, Q* = 30
d. P* = 60, Q* = 60
2.
Suppose that scientists find evidence that coffee consumption
lowers cholesterol. If so,
a. demand for coffee would remain the same
b. quantity...

The demand and supply curves for Fuji apples are given by
QD = 50 – 6P and
QS = 4P – 2, where P is price
per bag and Q is in thousands of bags. What are consumer
surplus and producer surplus at the equilibrium price?
Answer Choices:
CS = $29,422; PS = $44,180
CS = $15,006; PS = $7,657
CS = $856,000; PS = $1,126,113
CS = $450; PS = $375

Question 2. The market supply and demand curves for a product
are:
QS=0.5P (supply curve)
QD=60–2P (demand curve)
where Q is the quantity of the product and P is the market
price.
(1). Calculate the equilibrium price, equilibrium quantity and
total social welfare. (10 points)
(2). Suppose that the market has changed from a perfectly
competitive market to a monopoly market, calculate the new
price–output combination and the total deadweight loss in the
monopoly market. (10 points)

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