Refer to the table below. Fill in the surplus-shortage column
(gray cells).
Instructions: Enter your answers as whole numbers.
If you are entering any negative numbers be sure to include a
negative sign (-) in front of those numbers.
A. What is the equilibrium price in this market? $________
At what price is there neither a shortage nor
a surplus? $________
B. Graph the demand for wheat and the supply of wheat. Be sure
to locate the equilibrium price and quantity.
Instructions: Use the tools provided 'Supply' and
'Demand' to draw the demand and supply curves using the data in the
table. Include each price-quantity combination. Each line should
contain 6 reference points. Then use the tool provided 'Eq' to
identify the equilibrium price and quantity.
Instructions: Enter all numeric values without
a minus sign.
C. How big is the surplus or shortage at $3.40?
There is a ________ of ________ thousand
bushels.
What if the price is $4.90?
There is a ________ of ________
thousand bushels.
D. How big a surplus or shortage results if the price is 60
cents higher than the equilibrium price?
_______ thousand bushels.
E. How big a surplus or shortage results if the price is 30
cents lower than the equilibrium price?_______ thousand
bushels.
Answer
(1)
| Q Demanded | Price | Q Supplied | Surplus/Shortage |
| 88 | 3.4 | 65 | -23 |
| 81 | 3.7 | 71 | -10 |
| 75 | 4 | 75 | 0 |
| 70 | 4.3 | 78 | 8 |
| 66 | 4.6 | 80 | 14 |
| 63 | 4.9 | 81 | 18 |
(a) equilibrium price is when the market demand equals market
supply (that is, there is neither surplus, nor shartage).
As the table show, equilibrium price is $4
(b) The graph asks for a specific graphical tool which cannot be
used in this Q&A Board.
However, equilibrium price = $4 & quantity = 75
(c) When price = 3,4, demand = 88 & supply = 65, so there is
a shortage of 23.
If price is 4.90, Surplus = 18
(d) Here, Price = 4.6, so Surplus = 14
(e) Here, price = 3.70, so Shortage = 10