Describe how the supply curve for white beans

Reference no: EM133426008

Question: The purpose of this question is to illustrate how we use supply and demand equations to determine an equilibrium price and quantity, and then to see how a change in the price of a related good can lead to a shift in the demand curve and lead to a new equilibrium price and quantity. To illustrate these effects, we will continue with white bean example used in Question #1:
QD= 15 - 4PWB + 1.2 PO - 0.6PP + 0.0001Y (Demand)
QS = 0.5 + 10 PWB - 2.5 PSB (Supply)
where QD and QS are the quantities of white beans that are demanded and supplied, respectively (million kg of bean/year)
PWB is the price of white beans ($/kg)
PO is the price of other beans ($/kg)
PP is the price of pork ($/kg)
Y is the per capita income ($000)
PSB is the price of soybeans ($/bu)

a) Using the demand and supply curves above, and assuming PO =$1.30/kg and PP =$1.10/kg and Y=$45,000, and PSB =$15/bu
what is the equilibrium price and equilibrium quantity? Show your work.

b) Suppose the price of soybeans falls from $15/bu to $10/bu. Describe how the supply curve for white beans in Canada change because of the change in the price of soybeans. What is the new market equilibrium for white beans given the new price for soybeans?

Reference no: EM133426008

Questions Cloud

Safely eliminated from any moral system : Assess whether consideration of consequences can be safely eliminated from any moral system? Why do you think so?

Contributions of direct taxes to imposed taxes in finance : In terms of the incidence factor, examine and conceptualize the contributions of direct taxes to the imposed taxes in finance.

Research the top viral posts on buzzfeed : Research the top viral posts on BuzzFeed. Identify the structure, characteristics, and topics. Are there common threads? Based on what you found, pick a brand

Explain what financial economists mean : Explain what financial economists mean by an efficient market. Use evidence in your answer. If all information were immediately and correctly

Describe how the supply curve for white beans : Describe how the supply curve for white beans in Canada change because of the change in the price of soybeans. What is the new market equilibrium

Discusses the responsibility to supervisors and supervisees : This discussion board is all about Section 4 from the Ethics Code for Behavior Analysts, which discusses the responsibility to supervisors and supervisees.

Develop a new organizational structure that is in line with : Develop a new organizational structure that is in line with the changing nature of your organization to support growth, employee engagement and cross-functional

What is daubert rating for child abuse potential inventory : What is the Daubert rating for the Child Abuse Potential Inventory (CAPI) and where can I review that info? Daubert rating such as error rate, validity.

How much paper will domestic producers supply : Suppose the government imposes a $4 tariff on paper. How much paper will domestic producers supply with the tariff in place? Calculate the tariff revenue

User Account

All Pages