Agriculture Reference
In-Depth Information
1. Given these two estimates, solve for the market equilibrium price and quantity.
2. Now plot the individual supply and demand curves together for price levels from $5
through $50 in increments of $5 (i.e., $5, $10, $15, etc.) Is the market equilibrium the
same on your graph as calculated in Question 1?
3. This tractor part is often replaced if producers have extra income. What happens to the
supply and demand curves if net farm income is expected to increase by 10 percent?
4. Given the original demand price-quantity relationships, calculate the elasticity of
demand when:
a)
Prices increase from $20 to $25
b)
Prices increase from $35 to $40
5.
Given the original market equilibrium, what would happen to Armstrong Agribusiness
if a market price of $50 were set for this part? Explain. Use a graph if you believe this
will facilitate your analysis.
