Question
Suppose that the market for bananas in Binghamton on an average weekday is given by the following equations: demand: P = 92 - 2Q supply:
Suppose that the market for bananas in Binghamton on an average weekday is given by the following equations: demand: P = 92 - 2Q supply: P = 12 + 2Q where P is the price of a bushel in dollars and Q is quantity in bushels. a. What is the equilibrium price and quantity? Show graphically. b. Assume that the National Institutes of Health issues a study showing that bananas reduce the risk of cancer. The demand for bananas increases to: demand': P = 132 - 2Q At the original equilibrium price, is there a shortage or a surplus? Of how much? c. What is the new equilibrium price and quantity? Show graphically
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