The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country.Figure 21.2

-According to Figure 21.2, if the world price per bushel of wheat is $25, what is the domestic production?

Question

The figure given below depicts the negatively sloped demand and positively sloped supply curves of wheat in a country.Figure 21.2
 
-According to Figure 21.2, if the world price per bushel of wheat is $25, what is the domestic production?

Quizplus · Accepted Answer

At a world price of $25, the domestic price of wheat is also $25 (as shown where the world price line intersects with the domestic price line). At this price, the quantity demanded is 350 bushels, and the quantity supplied is 150 bushels. Therefore, domestic production is equal to 150 bushels.

The Figure Given Below Depicts the Negatively Sloped Demand and Positively