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You are hired by a local farmers' market to generate a demand curve for carrots. For this problem, assume no one has market power or
You are hired by a local farmers' market to generate a demand curve for carrots. For this problem, assume no one has market power or control in this market and that the farmers and buyers are price takers. Last month, the farmers sold carrots at $2 a bundle and sold 250 bundles. Two weeks ago, farmers raised the price of carrots to $5 a bundle and sold 175 bundles. They report the findings to you as: 4 Weeks ago: (250, $2) 2 Weeks ago (175, $5) Show your calculations for credit. 1) What is the demand curve for this market? 2) If the price is set at $4 next week, how many bundles will be sold? 3) The USDA reports that the carrots sold at this market contain plastic particles that could cause a negative health effects for consumers. What happens to demand? Is this a movement or a shift? If price is set at $2 again this week, do you expect more or less to be sold based on this shift? Why
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