Briefly answer each question based on Table 1-2. Table 1-2. Price per bushel Qua
ID: 1252583 • Letter: B
Question
Briefly answer each question based on Table 1-2.Table 1-2.
Price per bushel Quantity Demanded (bushels) Quantity Supplied (bushels)
$2 40,000 0
4 36,000 4,000
6 30,000 8,000
8 24,000 16,000
10 20,000 20,000
12 18,000 28,000
14 12,000 36,000
16 6,000 40,000
A/What is the equilibrium price and quantity of sorghum?
b/ Suppose the prevailing price is $6 per bushel. Is there a shortage or a surplus in the
market?
C/What is the quantity of the shortage or surplus?
D/How many bushels will be sold if the market price is $6 per bushel?
E/If the market price is $6 per bushel, what must happen to restore equilibrium in the
market?
f. /At what price will suppliers be able to sell 36,000 bushels of sorghum?
G/Suppose the market price is $14 per bushel. Is there a shortage or a surplus in the
market?
I/What is the quantity of the shortage or surplus?
K/How many bushels will be sold if the market price is $14 per bushel?
l. /If the market price is $14 per bushel, what must happen to restore equilibrium in the market?
Explanation / Answer
A/What is the equilibrium price and quantity of sorghum? price=10, quantity=20,000 because this is where quantity supplied=quantity demanded b/ Suppose the prevailing price is $6 per bushel. Is there a shortage or a surplus in the market? Since quantity demanded is greater than quantity supplied, there is a shortage. C/What is the quantity of the shortage or surplus? Quantity demanded=30,000 Quantity supplied=8,000 The difference between what is demanded and what is supplied is 30,000-8,000=22,000. The shortage is 22,000 bushels. D/How many bushels will be sold if the market price is $6 per bushel? 8,000 bushels will be sold. We can only sell what is produced. E/If the market price is $6 per bushel, what must happen to restore equilibrium in the market? Demand must decrease, or price must increase. f. /At what price will suppliers be able to sell 36,000 bushels of sorghum? Price=4 since that is where demand is equal to 36,000. You cannot sell what is not demanded. G/Suppose the market price is $14 per bushel. Is there a shortage or a surplus in the market? There is a surplus where price=14 since quantity demanded is less than quantity supplied. I/What is the quantity of the shortage or surplus? 36,000-12,000=24,000 The amount of the surplus is 24,000. K/How many bushels will be sold if the market price is $14 per bushel? Only 12,000 bushels will be sold since that is all that is demanded. l. /If the market price is $14 per bushel, what must happen to restore equilibrium in the market? Price must fall or demand must increase.
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