Determine the price differential, Microeconomics

Severe drought hit the coffee industry hard this year; as a result, more people are now switching to tea. The first table below shows the original supply and demand quantities in the tea industry. The second table shows the new supply and demand quantities as a result of the drought experienced in the coffee industry. Please use the tables below to draw a graph of the supply and demand of the tea industry both  before and after the drought. Second, indicate the equilibrium point before and after the drought and the quantity of excess demand. In addition, determine the price differential that will serve as motivation for tea manufacturers to sell at. (Note you can plot the graphs either on excel or by hand).

Before the Drought:

 Price

Supply

Demand

                    $0.8

1200

2300

0.9

1400

2000

1

1600

1600

1.1

1800

1400

1.3

2000

1300

1.5

2200

1200

After the Drought:

 Price

Supply

Demand

$0.8

1200

2500

0.9

1400

2200

1

1600

2000

1.1

1800

1800

1.3

2000

1600

1.5

2200

1400

Posted Date: 3/1/2013 7:21:25 AM | Location : United States







Related Discussions:- Determine the price differential, Assignment Help, Ask Question on Determine the price differential, Get Answer, Expert's Help, Determine the price differential Discussions

Write discussion on Determine the price differential
Your posts are moderated
Related Questions
what is externalities and market inefficiency

the short run can be defined as any period of time

State the example of price and price level Create a basket which contains all the goods sold by a specific store on a specific day. Price of this basket is then a price level -

Summarize the four supply factors in economic growth.

Private benefit and social benefit: Bridge the gab between private cost and social cost, and private benefit and social benefit.Under perfect market, there may be a divergence

limitation of kaldor hicks in compensation test and welfare criteria

Economic Reforms and Foreign Investment Inflows: A major objective of economic reforms was to increase foreign investment, which helps to increase capital formation of the eco

regis is hungry for a snack. Here is the value he place on a cupcake: value of the first cupcake$5, value of the second cupcake $4, value of the third cupcake $3, and the value of

schedules for cost