« previous next »

Author Question: Demand and supply in the wheat market are given by: QD = 2000 - 1000 P and QS = -500 + 1000 P ... (Read 82 times)

NClaborn

  • Hero Member
  • *****
  • Posts: 560
on: Jul 1, 2018
Demand and supply in the wheat market are given by:
 
  QD = 2000 - 1000 P and QS = -500 + 1000 P
 
  where Q is millions of bushels and P is price per bushel.
 
  a. Find the equilibrium price and quantity.
  b. Suppose that the government wishes to support farm income and thus sets a price floor of 1.50/bushel. Find the size of the farm surplus.
  c. What is the cost of this program to the government?

Question 2

If the demand curve a monopolist faces is perfectly elastic, then the ratio of the firm's price to the marginal cost is
 
  A) 0.
  B) 1.
  C) 2.
  D) None of the abovethe answer cannot be determined.


jointhecircus

  • Sr. Member
  • ****
  • Posts: 343
Reply #1 on: Jul 1, 2018
Answer to Question 1

a. P = 1.25, Q = 750
b. If P = 1.50, QD = 500 and QS = 1000. The surplus is 500 (million) bushels.
c. 1.50  500 = 750 million.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

After a vasectomy, it takes about 12 ejaculations to clear out sperm that were already beyond the blocked area.

Did you know?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

Did you know?

In most climates, 8 to 10 glasses of water per day is recommended for adults. The best indicator for adequate fluid intake is frequent, clear urination.

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Did you know?

In 1886, William Bates reported on the discovery of a substance produced by the adrenal gland that turned out to be epinephrine (adrenaline). In 1904, this drug was first artificially synthesized by Friedrich Stolz.

South polar cap in 2000 South polar cap in 2000
The Hepatic Portal Blood Supply The liver receives water, minerals, and nutrients from the digestive The Hepatic Portal Blood Supply The liver receives water, minerals, and nutrients from the digestive
Hydroelectric power: 2013 Global Market Hydroelectric power: 2013 Global Market
The growing demand for electrical power, carbon sequestration and storage must be a priority The growing demand for electrical power, carbon sequestration and storage must be a priority
Blood Supply to the Lungs Blood Supply to the Lungs
You deposit $2000 each year into an account earning 4% interest compounded annually. How much ... You deposit $2000 each year into an account earning 4% interest compounded annually. How much ...
Video: Virtual Enzyme Kinetics & Lineweaver Burk Plot

For a complete list of videos, visit our video library