Tuesday
March 31, 2015

Homework Help: economics

Posted by ratboy on Saturday, October 14, 2006 at 3:35am.

Q: The market demand and supply curves for an agricultural product are as follows:

Qd = 4500-250P and Qs = 200p

where quantities are in thousands of bushels per annum and price is in dollars per bushel.

the government wishes to acheive a higher point on the supply curve than the initial equilibrium. the desired point would involve both price and quantity being 10% greater that their initial equlibrium levels. the government is considerting either a subsidary or support price.

a) if the subsidary were used, how much would the subsidery per bushel have to be ? what would be the total cost on the government arising from this subsidary?--done this by getting equlibirum where p = 9.2 so subsidy is 11-9.2 = 1.8 and total cos to gov is 3960

regarding the answer to a, could u plesae explain to me why the equilibrium price for this calculation is not 10 and if not how did u get 9.2
many thanks

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Economics - The market demand and supply curves for an agricultural product are ...
microeconmics - hi guys, im stuck on this question, if anyone can help me out i ...
economics-worked out, need confirmation - hey ppl i have already done he working...
economics - 1. Suppose that the market of laptops is given by following supply ...
economics 11 - The demand and supply schedules for milk are as follows: Price ...
Finite Math - At a price of $ 1.94 per bushel, the supply corn in 9,800 million ...
Economics - Utilizing market demand and market supply curves for spaghetti, help...
Econ - How does the aggregate goods and services market differ from the regular...
Economics - Utilizing market demand and market supply curves for spaghetti, help...
Managerial Economics - Given the demand & supply Function for product 'x' at ...

Members