Q3 [1 10 points] Suppose that an estimated monthly demand and supply functions for apples in the US. are given by: Qd=20040p+20pq+0.015Y Q=85+35p20pf where Qd is the quantity of apples demanded in tons per month; p is the price of apples in US dollars per kilogram; pg is the price of quince (a substitute good) in dollars per kilogram; Y is the income of consumers per month in thousand dollar; Q, is the quantity of apples supplied in tons per year; pf is the price of fertilizer ( an input) in dollars. And suppose further that pg is $2 per kilogram; Y is 4000 per month; pf is $0 .50 per kilogram. Answer the following questions. 3) Draw the demand curve for apples. You should be very precise and accurate in your drawing, especially when showing the price and quantity intercept values on the diagram. b) Calculate the responsiveness of a change in the quantities demanded to a unit change in the price (i.e., show how the quantities demanded would change if the price changes by a unit). Explain your answer. c) Write the inverse demand function and calculate the slope of the demand curve. What does it tell us regarding the relationship between the price of apple and the quantities demanded. Explain your result. d) How would the demand curve shift if per capita income increases from $4000 to $6000 per month. Show the change on a new diagram. 2) Draw the supply curve for apples. You should be very precise and accurate in your draw- ing, especially when showing the price and quantity intercept values on the diagram. f) Calculate the responsiveness of a change in the quantities supplied to a unit change in the price (i.e., show how the quantities supplied would change if the price changes by a unit). Explain your answer. g) Calculate the slope of the supply curve. What does it tell us regarding the relationship between the price of apple and the quantities demanded. Explain your result. 11) How would the supply curve shift if the price of fertilizer (pf) rises from $0.5 to $1 per kilogram. Show the change on a new diagram. i) Show the market equilibrium for apples on a diagram. pg = $2 per kilogram; Y = $4000; pf = $0 .50 per kilogram per month What is the equilibrium quantity? What is the equilibrium price? What is the total revenue created in the apple market? j) Calculate the amount of surplus/ shortage at a price of $2 per kilogram. pg = $2 per kilogram; Y = $4000; pf = $0 .50 per kilogram per month Explain how market forces will tend to make price and quantity move toward the equilib- rium point. 1:) Calculate the amount of surplus/ shortage at a price of $4 per kilogram. pg = $2 per kilogram; Y = $4000; pf = $0 .50 per kilogram per month Explain how market forces will tend to make price and quantity move toward the equilib- I'lUI'II pornt