3. Refer to Example 2.5 (page 3?) on the market for wheat. in 1998, the total demand for US. wheat was Q = 3244 23319 and the domestic supply was 5 = 1944 + ZUFP. At the end of 1993, both Brazil and Indonesia opened their wheat markets to U.S. farmers. Suppose that these new markets add 200 mil- lion bushels to U.S. wheat demand. What will be the free-market price of wheat and what quantity will be produced and sold by US. farmers? demand curve for wheat was Demand: OD = 3550 - 266P By setting the quantity supplied equal to the quantity demanded, we can determine the marketclearing price of wheat for 1981: Q5 = GD 1800 + 240P = 3550 266P 506P = 1750 P = $3.46 per bushel To find the market-clearing quantity, substitute this price of $3.46 into either the supply curve equation or the demand curve equation. Substituting into the supply curve equation, we get 0 = 1800 + (240)(3.46) = 2630mi||ion bushels EXAMPLE 2.5 THE MARKET FOR WHEAT Wheat is an important agricultural commodity, and the wheat market has been studied extensively by agricultural economists. During recent decades, changes in the wheat market had major implications for both American farmers and U5. agricultural policy. To under- stand what happened, Iet's examine the behavior of supply and demand begin- ning in 1981. From statistical studies. we know that for 1981 the supply curve for wheat was approximately as follows:8 Supply: 05 = 1800 + 240P where price is measured in nominal dollars per bushel and quantities in millions of bushels per year. These studies also indicate that in 1981, the demand curve for wheat was