Cranberry productions in Mass totaled 1.8 million barrels in 2004, 28% increase from previous year's production. This year's crop avg 127.9 barrels per acre, an increase of over 30 barrels per acre from 2003 crop. But demand increased by even more than supply, actually pushing 2004 prices above 2003 prices. illustrate the following with supply and demand curves. I am so confused please help.
To illustrate the relationship between supply and demand in the cranberry market, we can use supply and demand curves. These curves represent the quantity of cranberries supplied and demanded at different price levels.
Let's break down the information provided:
1. Total Production: In 2004, cranberry production in Massachusetts totaled 1.8 million barrels, which was a 28% increase from the previous year's production. This increase in production suggests an upward shift in the supply curve.
2. Crop Yield: The average production per acre in 2004 was 127.9 barrels, which was an increase of over 30 barrels per acre compared to the 2003 crop. This increase in yield per acre also contributes to the supply shift upwards.
3. Demand: The demand for cranberries increased by more than the supply, which pushed the prices in 2004 above the prices in 2003. This increase in demand indicates a rightward shift in the demand curve.
Based on this information, we can draw the following diagram:
Price
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| D2
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| D1
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| S2
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| S1
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Quantity
In this diagram, the demand curve shifts to the right from D1 to D2, indicating an increase in demand. The supply curve also shifts to the right from S1 to S2, indicating an increase in supply. The intersection of the new supply and demand curves determines the equilibrium price and quantity in 2004.
Due to the higher increase in demand compared to supply, the equilibrium price in 2004 is higher than in 2003. This reflects the statement that 2004 prices were above 2003 prices due to the increase in demand.
Note that the exact position of the curves and the equilibrium point would require specific numerical values of prices and quantities, which are not explicitly provided in the given information. However, this response outlines the general relationship between supply, demand, and price based on the information provided.