Use the tables below to answer this question about the market for Maine lobsters
ID: 1135805 • Letter: U
Question
Use the tables below to answer this question about the market for Maine lobsters.
Supply Schedule
Price of lobsters per pound Quantity of lobsters supplied in pounds
$30 700
$25 600
$20 500
$15 400
$10 300
Demand Schedule – United States
Price of lobsters per pound Quantity of lobsters demanded in pounds
$30 400
$25 600
$20 800
$15 1,000
$10 1,200
Demand Schedule - France
Price of lobsters per pound Quantity of lobsters demanded in pounds
$30 300
$25 500
$20 700
$15 900
$10 1,100
11A (4 pts.) If Maine lobster catchers can only sell their lobsters in the United States, what is the equilibrium price AND quantity?
11B (4 pts.) If Maine lobster catchers can sell their lobsters in both the United States and France, what is the equilibrium price AND quantity?
Explanation / Answer
From the demand and supply schedules in the United States, we see that the market quantity demanded and supplied are equal at a value of 600 units at a price of $25. Hence if Maine lobster catchers can only sell their lobsters in the United States, the equilibrium price is $25 and quantity is 600 units
Adding the demand schedules in both nations, we see that when the price is $30, the total quantity demanded is (400 + 300) = 700 units and quantity supplied is also 700 units at this price. Thus, if Maine lobster catchers can sell their lobsters in both the United States and France, the equilibrium price is $30 and the quantity is 700 units.
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