Question

# PREPARE A GRAPH WHICH SHOWS THE DEMAND AND SUPPLY FOR A WHEAT WHERE THE TWO CURVES...

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

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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