Determine the price differential, Microeconomics

Assignment Help:

Severe drought hit the coffee industry hard this year; as a result, more people are now switching to tea. The first table below shows the original supply and demand quantities in the tea industry. The second table shows the new supply and demand quantities as a result of the drought experienced in the coffee industry. Please use the tables below to draw a graph of the supply and demand of the tea industry both  before and after the drought. Second, indicate the equilibrium point before and after the drought and the quantity of excess demand. In addition, determine the price differential that will serve as motivation for tea manufacturers to sell at. (Note you can plot the graphs either on excel or by hand).

Before the Drought:

 Price

Supply

Demand

                    $0.8

1200

2300

0.9

1400

2000

1

1600

1600

1.1

1800

1400

1.3

2000

1300

1.5

2200

1200

After the Drought:

 Price

Supply

Demand

$0.8

1200

2500

0.9

1400

2200

1

1600

2000

1.1

1800

1800

1.3

2000

1600

1.5

2200

1400


Related Discussions:- Determine the price differential

Externalities, what is externalities and market inefficiency

what is externalities and market inefficiency

Explain the duality between direct and indirect utility, Explain about the ...

Explain about the duality between direct and indirect utility. Duality between Direct and Indirect Utility: While seen how one can recover an indirect utility function by ob

Negative profit, Negative profit  FC + VC > R(q) MR > MC ...

Negative profit  FC + VC > R(q) MR > MC    Indicates higher profit at the higher output - Question: Why is profit negative when the output is zero? - Outp

Determine the consumer surplus and the average price per cup, Suppose the d...

Suppose the demand curve for a consumer for coffee is: Q = 6 – 2P, where Q represents the number of cups per day and P is the price of coffee per cup.  Question: Sppose the co

Elasticity, Calculate the price elasticity of demand or supply for the foll...

Calculate the price elasticity of demand or supply for the following function when P=8 p=6(I)p=40-0.5q

Economic planning, what are the recommendations for effective economic plan...

what are the recommendations for effective economic planning?

Introduction, What is micro static analysis?

What is micro static analysis?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd