The demand and supply equations for the apple market are:
Demand: P = 12 - 0.01Q
Supply: P = 0.02Q
Where P= price per bushel, and Q=quantity.
A)Calculate the equilibrium price and quantity.
B)Suppose the government guaranteed producers a price of $10 per bushel.What would be the effect on quantity supplied? Provide a numerical value.
C)By how much would the $10 price change the quantity of apples demanded? Provide a numerical value.
D)Would there be a shortage or surplus of apples?
E)What is the size of this shortage or surplus? Provide a numerical value.
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