Find the equilibrium price and quantity if income increases

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Reference no: EM13921837

Suppose the supply and demand for wheat is given by:

Supply: Qs = 1,800 + 240P Demand: Qd = 2,550 + 10I - 266P

Where P = the price per bushel of wheat and I = income. The current value of I is 100.

a. Find the current equilibrium price and quantity of wheat sold in the marketplace.

b. Find the equilibrium price and quantity if income increases to 150.

c. Show the change in equilibrium using a standard supply and demand graph. Make sure to label the axes and the curves. The graph does not need to be to scale. Just illustrate in a general way what is going on.

Reference no: EM13921837

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