please explain thank you 3.2 The following diagram represents the market for tom
ID: 1133035 • Letter: P
Question
please explain
thank you
3.2 The following diagram represents the market for tomatoes. Owing to the pressure of farmers, the government imposes a price floor of R25 per kg on toma 35 ts tomato toes. 15 000 20 000 25 000 At a price floor R25 per kg [1] households are willing and able to purchase 20 000 kg of tomatoes. [3] the quantity of tomatoes offered for sale will be the same as the quantity 14] the quantity of tomatoes offered for sale will be more than the qua -[2] an excess demand of 10 000 kg exists. purchased. ntity purchasedExplanation / Answer
Price floor of R25 on tomato will lead to increase the maket price as shown in the diagram, the price at equilibrium P0 was less than R25. So the suppiers will supply more quantity of supply, due to law of supply ( s price rises, quantity suppied also rises) and the diagram show that at price R25, the quantity offered for sale is 25000 while the quantity purchased ( quantity demanded) is 15,000, and excess supply of 10000 kg of tomatoes.
It means that the quanitity of tomatoes offered for sale will be more than quantity puchased.
Correct ans is D).
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.