1. Agricultural production is highly competitive for most commodities. Potatoes are no exception: price is determined by demand and supply. Based on statistics from the USDA, demand for table potatoes in the US is estimated to be: Q_D=184 -20P

where P is the price per 100 lbs. of potatoes and#is per-capita potato consumption (in pounds). Supply is given by the following: Q_S= 124 +4P

A. Find the competitive market price and quantity.

B. Potato farmers in Ohio raise about 3% of the total output of potatoes in the country. If Ohio experiences a record yield this year, and yields are 10% higher than average, is this likely to have much effect on price? What kind of effect will it have on the revenue of Ohio's potato farmers?

C. Suppose that favorable weather across the country means that yield increases 10% nationwide.

1. What is the new market price?
2. How much does revenue for the industry change?
3. Is demand elastic or inelastic at the market equilibrium price and quantity you found in part a.? (Remember the point elasticity formula)