Calculate the original market equilibrium price and quantity

Assignment Help Econometrics

Reference no: EM131068421

Suppose the demand function for corn is Qd =10 -2 p , and supplyfunction isQs = 3p -5 . The government is concerned that the market equilibrium price of corn is too low and would like to implement a price support policy to protect the farmers. By implementing the price support policy, the government sets a support price and purchases the extra supply at the support price. In this case, the government sets the support price ps = 4.

(a) Calculate the original market equilibrium price and quantity in absence of the price support policy.

(b) At the support price ps = 4 , find the quantity supplied

Reference no: EM131068421

Questions Cloud

What is the relative price of root beer in terms of cds : What is the relative price of root beer in terms of CDs

Which methods have been followed in india : Which methods have been followed in India?

Calculate chi-square statistic from this contingency table : Return to the CDC Wonder website, and obtain the numbers of births in your state between 2007 and 2012, by month. (Disregard gender, or race, or birth order-you want all births). Calculate a chi-square statistic to assess whether there is any seas..

Find the demand and revenue schedules : Find the demand and revenue schedules.

Calculate the original market equilibrium price and quantity : Calculate the original market equilibrium price and quantity in absence of the price support policy.

Coupon bond with eleven years to maturity and current price : Consider a 8.4 percent coupon bond with eleven years to maturity and a current price of $1,041.40. Suppose the yield on the bond suddenly increases by 2 percent. a. Use duration to estimate the new price of the bond b. Calculate the new bond price

True of the purchase and sale of assets : Which of the following statements is true of the purchase and sale of assets?

What is the macaulay duration of coupon bond : What is the Macaulay duration of a 6.2 percent coupon bond with five years to maturity and a current price of $1,064.70? What is the modified duration?

What is the percentage price change of bonds : Bond J is a 7 percent coupon bond. Bond K is a 11 percent coupon bond. Both bonds have 12 years to maturity and have a YTM of 8 percent. a. If interest rates suddenly rise by 1.6 percent, what is the percentage price change of these bonds? b. If inte..

User Account

All Pages