Question

PREPARE A GRAPH WHICH SHOWS THE DEMAND AND SUPPLY FOR A WHEAT WHERE THE TWO CURVES INTERSECT AT THE POINT OF EQUILIBRIUM. INDICATE, SURPLUS AND SHORTAGE ON THE GRAPH.

DATA:

THE QUANTITIES OF WHEAT FARMERS WILL SUPPLY AT VARIOUS PRICES: TABLE-1

PRICE PER BUSHEL                                   BUSHELS SUPPLIED PER YEAR

DOLLARS………………………………………..12,000
4.    DOLLARS………………………………………..10,000

3.    DOLLARS………………………………………….7,000

2.    DOLLARS………………………………………….4,000

1.    DOLLAR……………………………………………1,000

                    THE QUANTITIES OF WHEAT CONSUMERS WILL PURCHASE AT

                    VARIOUS PRICES

                    PRICE PER BUSHEL.                                   BUSHELS DEMANDED PER YEAR

                    ------------------------------------------------------------------------------------------  

                                               5.      DOLLARS………………………………………………2,000                                                      

                                               4.      DOLLARS………………………………………………4,000

                                               3.     DOLLARS…………………………………………….   7,000

                                               2.     DOLLARS…………………………………………… 11,000

                           1      DOLLAR…………………………………………….. 16,000

Answer 1

Solution:

As per schedule:

Price ($)	Demand	Supply
1	16000	1000
2	11000	4000
3	7000	7000
4	4000	10000
5	2000	12000

E is the point of equilibrium where demand and supply intersects. $3 equilibrium price and 7000 equilibrium quantity

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