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AEM 4150
Price Analysis
Fall Semester 2009
Homework Assignment 6
This assignment is due at the beginning of class on Tuesday, October 27, 2009.
Question 1
The following are supply and demand curves for potatoes at the farm and retail level:
(1)
Retail Demand (
D
r
)
P
r
= 50  0.75Q
(2)
Marketing Margin
(M)
M = 32  0.48Q
(3)
Farm Supply
(S
f
)
P
f
= 20 + 1.43Q
In the above, P
r
is the U.S. average retail price per sack, Q is total quantity of sacks
marketed (in millions of sacks), P
f
is the average price per sack received by potato
growers, M reflects cost of shipping, wholesale, and retail operations.
The supply
equation predicts the quantity produced for a given P
f
after producers have had time to
adjust production levels to that price.
Answer the following (
please show your work and circle your answers where
appropriate
).
(a)
(1 point) Graph the retail demand, and farm supply curves.
Label all curves and
axes.
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This note was uploaded on 08/30/2010 for the course AEM 4150 at Cornell University (Engineering School).
 '07
 KAISER,H.M.

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