The table below contains information about the wheat market. Use it to answer the following questions:
Wheat Market
Price Per Bushel Quantity Demanded (bushels) Quantity Supplied (bushels)
$5 30,000 0
$7 26,000 4,000
$10 22,000 9,000
$14 18,000 12,000
$17 15,000 15,000
$20 12,000 22,000
$23 8,000 28,000
$28 4,000 36,000
Plug the numbers in the chart into MS Excel and produce a Supply and Demand Chart, which you include with your answer sheet for submission.
What are the equilibrium price and quantity of wheat?
Suppose the prevailing price is $15 per bushel. Is there a shortage or a surplus in the market? Explain why.
What is the quantity of the shortage or surplus? Show your calculations.
How many bushels will be sold if the market price is $10 per bushel? Show calculations.
If the market price is $14 per bushel, what must happen to restore equilibrium in the market? Explain.
At what price will suppliers be able to sell 22,000 bushels of wheat? Explain what would have to happen.
Suppose the market price is $25 per bushel. Is there a shortage or a surplus in the market? Why? Explain.
What is the total quantity of the shortage or surplus?
How many bushels will be sold if the market price is $24 per bushel?
If the market price is $21 per bushel, what must happen to restore equilibrium in the market? Why should that happen?