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Question
In Agfa, at a market price of $3 per kilo, there is a shortage of 60 kilos of basmati rice. For each 50-cent increase in the price, the quantity demanded drops by 8 kilos, while the quantity supplied increases by 12 kilos. Please provide solutions.
1. What will be the equilibrium price?
2. What will be the surplus/shortage at a price of $5.50?
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