AGEC 220 HW4

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price quant. quant. quant. ROC FL Trade P r0 Q r0 Q f0 P f0 S r D r S f D f Canada Trade Sector ED S D S D ES CAN\$/lb CAN\$/lb US\$/lb US\$/lb US price price price quant. quant. quant. Japan U.S. Trade Sector S S D D Name_________________________________________Seat No._____ AGEC 220, Balagtas AGEC 220: Marketing Farm Products Homework #4: Analysis of Trade The Algebra of Trade Analysis 1. Suppose demand and supply for a commodity in Market A are as follows Demand Q = 100 – 4P Supply Q = 20 + 4P (a) Find the equilibrium autarky price and quantity in Market A. (3 points) (b) Use the supply and demand equations above to find Excess Demand in Market A, ED A = Demand – Supply. (2 points) Now suppose demand and supply for the same commodity in Market B are as follows Demand Q = 46 – 2P Supply Q = 30 + 2P (c) Find the Excess Supply of the commodity in Market B, ES B = Supply – Demand (3 points). (d) Using your answers in parts (b) and (c), find the equilibrium price and quantity traded if

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