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Unformatted text preview: is 150. Is the market in equilibrium? If not, is there shortage or surplus? How big is it? Illustrate your answer on a graph. *7. Consider the market for bananas. b Supply curve: QS = 4P – 10 b Demand curve: QD = 50 – 2P b b QD (QS ) is the market demand (supply) for (of) bananas and P is price of bananas. 1 a. In a clear well labelled diagram, draw the supply and demand curves for this market. b. Find the equilibrium market price and quantity and label them in the diagram. Consider what might happen to the market equilibrium if: c. Cyclone Yasi strikes Queensland, destroying most of the banana crop. d. Scientists discover that bananas have profound anti‐ageing effects. *8. Homer has a demand for oranges given by: qH H p 5 d , where p is the market price and qd is Homer’s demand for oranges. 3 Homer’s friend, Ned, has a demand curve for oranges given by: N N p 5 qd , where p is the market price and qd is Ned’s demand for oranges. a. Draw both demand curves on separate graphs. b. Find the market demand curve and draw in a well labelled diagram. *9. Consider the market for coffee beans. Assume...
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