Bu224 - Unit 3 Assignment - Kaplan

Topics: Supply and demand, Demand curve, Inverse demand function Pages: 4 (758 words) Published: June 21, 2012
Problem 1:
Suppose that the supply schedule of Belgium Cocoa beans is as follows: |Price of cocoa beans (per pound) |Quantity of cocoa beans supplied (pounds) | |$40 |700 | |$35 |600 | |$30 |500 | |$25 |400 | |$20 |300 |

Suppose that Belgium cocoa beans can be sold only in Europe. The European demand schedule for Belgium cocoa beans is as follows: |Price of Belgium cocoa beans (per pound) |Quantity of Belgium cocoa beans demanded (pounds) | |$40 |100 | |$35 |300 | |$30 |500 | |$25 |700 | |$20 |900 |

(a) Draw the demand curve and the supply curve for Belgium cocoa beans. What are the equilibrium price and quantity of cocoa beans from Belgium?

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The equilibrium price of cocoa beans is $30 and the equilibrium quantity is 500 pounds. It is the point in the graph where the supply and demand...
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