Question
The demand and the supply for broccoli1 in Veganstan's closed economy are given by QD = 60 - 2P, and QS = 38P. We assume
The demand and the supply for broccoli1 in Veganstan's closed economy are given by QD = 60 - 2P, and QS = 38P. We assume the market is perfectly competitive. 1: Compute the closed economy equilibrium price PCE and quantity QCE. 2: Plot on a graph: the demand, the supply, and the equilibrium price and quantity. 3: Using the demand and supply graph/diagram, analyse the impact on the equilibrium price and quantity, under each one of the following scenarios: a) a hailstorm damages the crop; b) a new type of manure becomes available, which increases the yield per acre; c) a hailstorm damages the crop while at the same time a new type of manure becomes available.
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