This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: (c) Now suppose that a freeze in Florida reduces orange juice supply by 300 million gallons at each price. Using your initial demand graphically show how it would affect the supply curve. What is the new equilibrium price and quantity? (2+4+4 = 10 points) 3. Consider the demand and supply function of the following form: Q d = 2P + 20 Q s = 2P 4. where Q s is the quantity supplied, Q d is the quantity demanded and P is the price. (a) Solve for the equilibrium price and quantity. Also graph the supplydemand equilibrium. (b) Now suppose at each price that individuals demand four more units of output and the demand curve shifts to Q / d = 2P + 24 Graph this situation and also calculate the new equilibrium pricequantity using the initial supply function. (c) Now, suppose the supply curve shifts to Q / s = 2P 8. 2 What is the new equilibrium price and quantity, using the new demand function? Graph the situation also. (2+4+4=10 points)...
View Full
Document
 Spring '08
 Ghosh
 Supply And Demand

Click to edit the document details