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
Situation is where a luxury is there. There is the snob appeal possibility where the higher the price, the more desired the commodity it.  Often people will drive expensive cars, e

explain diagrammatically the bains model of limit pricing.

A trust is build to acquire shares in organizations for subsequent allocation to employees over time by time.

Suppose that Congress increases the minimum wage to $10 an hour. a. Use a supply and demand model for unskilled labor to show the effect on the number of unskilled workers employed

Perfectly Competitive Markets * Characteristics of Perfectly Competitive Markets  1. Price taking  2. Product homogeneity  3. Free entry and exit * Price Taking


HOW DO YOU ADJUST FISCAL POLICY FOR INTERNAL BALANCE

There are two individuals in town, one is high risk and the other is low risk. 1 The probabilities of having an accident for the low risk individual and high risk individual are p

How to determine the number of moles of butane by your number of moles of butane? using (PV=nRT)

Jeremy is an economics student who loves hamburgers. He could eat any number of them for dinner, but he gets a really bad stomach ache after eating a certain amount. In fact, his u