Solved problem 22 how does a quota set by the united

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Solved Problem 2.2 How does a quota set by the United States on foreign steel imports of affect the total American supply curve for steel given the domestic supply, S d in panel a of the graph, and foreign supply, S f in panel b? Q
©  2009 Pearson Addison- 2- Solved Problem 2.2
©  2009 Pearson Addison- 2- Market Equilibrium Equilibrium - a situation in which no one wants to change his or her behavior. excess demand the amount by which the quantity demanded exceeds the quantity supplied at a specified price. excess supply the amount by which the quantity supplied is greater than the quantity demanded at a specified price
©  2009 Pearson Addison- 2- Figure 2.6 Market Equilibrium p , $ per kg 220 176 D S e 233 246 194 207 Q , Million kg of pork per year 0 3.95 3.30 2.65 Excess supply = 39 Excess demand = 39 Market equilibrium point! At a price below equilibrium…. the quantity supplied…. is below the quantity demanded At a price above equilibrium…. the quantity demanded…. is below the quantity supplied
©  2009 Pearson Addison- 2- Using Math to Determine the Equilibrium Demand: Q d = 286 − 20 p Supply: Q s = 88 + 40p Equilibrium: Q d = Q s 286 − 20 p = 88 + 40p 60p = 198 P = $3.30 Q = 286 – 20(3.3) = 220
©  2009 Pearson Addison- 2- Equilibrium: Practice Problem The demand function for a good is Q = a−bp , and the supply function is Q = c + ep , where a, b, c , and e are positive constants. Solve for the equilibrium price and quantity in terms of these four constants.
©  2009 Pearson Addison- 2- Shocking the Equilibrium The equilibrium changes only if a shock occurs that shifts the demand curve or the supply curve. These curves shift if one of the variables we were holding constant changes.
©  2009 Pearson Addison- 2- Figure 2.7a Equilibrium Effects of a Shift of a Demand Curve D 1 D 2 S 176 0 220 228 232 Q, Million kg of pork per year Excess demand = 12 3.30 3.50 e 2 e 1 p , $ per kg A $0.60 increase in the price of beef shifts the demand outward At the original price there is now an excess demand…. Which puts an upward pressure in the price to a new equilibrium.
©  2009 Pearson Addison- 2- Figure 2.7b Equilibrium Effects of a Shift of a Supply Curve S 1 S 2 Q, Million kg of pork per year 3.30 3.55 e 1 e 2 D p , $ per kg 176 0 220 205 215 Excess demand = 15 A $0.25 increase in the price of hogs shifts the supply curve to the left At the original price there is now an excess demand…. Which puts an upward pressure in the price to a new equilibrium.
©  2009 Pearson Addison- 2-

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