Green et al. (2005) estimate the supply and demand curves for California processed tomatoes. The supply function is: In(Qg) = 0.200 + 0.550 In(p), where Q is the quantity of processing tomatoes in millions of tons per year and p is the price in dollars per ton. The demand function is: In(Qg) = 2.600 - 0.200 In(p) + 0.150 In(pt), where p, is the price of tomato paste (which is what processing tomatoes are used to produce) in dollars per ton. Suppose pt = $109. Determine how the equilibrium price and quantity of processing tomatoes change if the price of tomato paste falls by 7%. If the price of tomato paste falls by 7%, then the equilibrium price will by S. (Enter a numeric response using a real number rounded to two decimal places.

Green et al. (2005) estimate the supply and demand curves for California processed tomatoes. The supply function is: In(Qg) = 0.200 + 0.550 In(p), where Q is the quantity of processing tomatoes in millions of tons per year and p is the price in dollars per ton. The demand function is: In(Qg) = 2.600 - 0.200 In(p) + 0.150 In(pt), where p, is the price of tomato paste (which is what processing tomatoes are used to produce) in dollars per ton. Suppose pt = $109. Determine how the equilibrium price and quantity of processing tomatoes change if the price of tomato paste falls by 7%. If the price of tomato paste falls by 7%, then the equilibrium price will by S. (Enter a numeric response using a real number rounded to two decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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