The total demand for wheat in the U.S. is given by Qd = 1,750 − 130P. Domestic supply is given by, Qs = 1,000 + 170P. Price is measured in dollars/ton and quantity is measured in thousands of tons. The equilibrium price and quantity of wheat are:
A) $4.78 a ton and 1,129 thousands of tons, respectively.
B) $4.78 a ton and 1,813 thousands of tons, respectively.
C) $2.50 a ton and 2,075 thousands of tons, respectively.
D) $2.50 a ton and 1,425 thousands of tons, respectively.

Question

Quizplus · Accepted Answer

To find the equilibrium, set Qd = Qs: 1,750 - 130P = 1,000 + 170P. Solving for P gives P = $2.50. Substituting P = $2.50 into either Qd or Qs gives the equilibrium quantity of 1,425 thousands of tons.

The Total Demand for Wheat in the U