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The table below contains information about the corn market. Use it to answer the following questions: Price Per Bushel Quantity Demanded (bushels) Quantity Supplied (bushels)
- The table below contains information about the corn market. Use it to answer the following questions:
Price Per Bushel | Quantity Demanded (bushels) | Quantity Supplied (bushels) |
$3 | 30,000 | 0 |
$6 | 26,000 | 4,000 |
$9 | 22,000 | 9,000 |
$12 | 18,000 | 12,000 |
$15 | 15,000 | 15,000 |
$18 | 12,000 | 22,000 |
$21 | 8,000 | 28,000 |
$24 | 4,000 | 36,000 |
- Plug the numbers in the chart into MS Excel and produce a Supply and Demand Chart.
- What are the equilibrium price and quantity of corn?
- Suppose the prevailing price is $9 per bushel. Is there a shortage or a surplus in the market? Explain why.
- What is the quantity of the shortage or surplus? Show your calculations.
- How many bushels will be sold if the market price is $9 per bushel? Show calculations.
- If the market price is $9 per bushel, what must happen to restore equilibrium in the market? Explain.
- At what price will suppliers be able to sell 22,000 bushels of corn? Explain what would have to happen.
- Suppose the market price is $21 per bushel. Is there a shortage or a surplus in the market? Why, explain.
- What is the total quantity of the shortage or surplus?
- How many bushels will be sold if the market price is $21 per bushel?
- If the market price is $21 per bushel, what must happen to restore equilibrium in the market? Why should that happen?
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