Question

Suppose that the supply schedule of Maine lobsters is as follows:
Price of lobster Quantity of lobster supplied
(per pound) (pounds)
$ 25 800
$ 20 700
$ 15 600
$ 10 500
$ 5 400

Suppose that Maine lobsters can be sold only in the United States. The U.S. demand schedule for Maine lobsters is as follows:

Price of lobster Quantity of lobster demanded
(per pound) (pounds)
$ 25 200
$ 20 400
$ 15 600
$ 10 800
$ 5 1,000

a. Looking at both the schedules of supply and demand, as well as the graph of the demand and supply curve for Maine Lobsters, what is the equilibrium price of lobsters and the equilibrium quantity of lobsters demanded and supplied at that price? (5 points)


b. Now, suppose that Maine lobsters can also be sold in France. The French demand schedule for Maine lobsters is as follows:

Price of lobster Quantity of lobster demanded
(per pound) (pounds)
$ 25
$ 20
$ 15
$ 10
$ 5

What is the demand schedule for Maine lobsters now that French consumers can also buy them?

Hey the professor wants me to find the demand schedule for french consumers?

Answer 1

You can plot both datasets and you can see clearly that here is anintersect. This is at a quantity of 600 and at a price of 15 $. Youcan also make equations from both:

supply = 300 +20x
demand = 1200- 40x
equillibrium: supply=demand = 300+20x=1200-40x
gives x= 15
Then, you can fill in x in the demand or supply function, whichgives a quantity of 600
+


supply = 300 +20x
demand(France) = 1100- 40x
1100-40x= 300+20x
800= 60x --> x= 13.3 price of thelobsters
300+20*13.3=566.67 demand

The demand in the US is higher, so the fishermans should sell therelobsters to the US.