are 100 points. Write yoe Full marks efully before answering them. Be Tostruceto
ID: 1163758 • Letter: A
Question
are 100 points. Write yoe Full marks efully before answering them. Be Tostrucetons: You have 2 bours to complere this exam answers on the Answer Sheer. Read the questions oar The table shows the demand and supply schedules quantity ofmilk (596) and keep to the point. Good luckf for milk (30%) 4. A Price dollars uantit per carton . What is the equilibriumi price and equilibriurm ) demandea supplied b. Describe the situation in the milk market if the price were $1.75 a carton and explain how the market reaches its new equilibrium. (10%) 200 1.00 1.25 1.50 1.75 2.00 11o 175 es more popular and better feeds production How do these events demand and supply? Describe how the c. Milk becom 150 milk 170 100 change. equilibrium price and equilibrium quantity (15%Explanation / Answer
1.
a. Equilibrium exists where quantity demanded equals quantity supplied which as given in the table is at price 1.50 where demand and supply are equal and 150 units.
b. If price were 1.75 then the market is at a situation where there is excess supply. Quantity supplied is greater than quantity demanded.
c. If milk becomes more popular and better feeds increase milk production then more milk will be sold and supply curve would shift outwards increasing the quantity and reducing the price.
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