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ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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
Transcribed Image Text:Part I The headline about Russian wheat suggests the market is broken. Illustrate the supply and demand
for Russian wheat indicating the price in relation to equilibrium. Explain why the market is "broken," and
what needs to occur to fix the market. Russian wheat trade falls silent as price floor leaves market 'broken'
HIGHLIGHTS Russian wheat not offered below $275/mt since late March Government believed to have
intervened to support prices, farmers Traders assess pricing power of Russian state in global market Part II
Derive the demand and supply functions using the numbers in the table and calculate equilibrium price and
quantity. Graph supply and demand and indicate equilibrium price and quantity. The government wants to
help sugar consumers by setting the price at $2.50. Explain the outcome (in terms of Q and D) and your
advice in this situation. Illustrate the effect on the same graph and be sure to indicate price and quantities.
Price/bag Quantity demanded (bags of sugar) Quantity supplied (bags of sugar) $2 500 100 $3 450 300 $
4 400 500 $5 350 700 $6 300 900

Transcribed Image Text:Price/bag
$2
$3
$4
$5
$6
Quantity Quantity
supplied
demanded
(bags of
sugar)
500
450
400
350
300
(bags of
sugar)
100
300
500
700
900
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