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Answer to Question #47884 in Microeconomics for Asad Badvi

Question #47884
Q7. “In the corn market, demand often exceeds supply and supply sometimes exceeds demand.” “The price of corn rises and falls in response to changes in supply and demand.” In
Which of these two statements are the terms “supply” and “demand” used correctly? Explain.
Q8. KEY QUESTION Suppose the total demand for wheat and the total supply of wheat per month in the Kansas City grain market are as shown in the accompanying table.
a. What is the equilibrium price? What is the equilibrium quantity? Fill in the surplus-shortage column and use it to explain why your answers are correct.
b. Graph the demand for wheat and the supply of wheat. Be sure to label the axes of your graph correctly. Label equilibrium price P and equilibrium quantity Q.
c. Why will $3.40 not be the equilibrium price in this market? Why not $4.90? “Surpluses drive prices up; shortages drive them down.” Do you agree?
Expert's answer
Q7. “In the corn market, demand often exceeds supply and supply sometimes exceeds demand.” “The price of corn rises and falls in response to changes in supply and demand.” 
The terms “supply” and “demand” are used correctly in the second statement, because only quantity supplied may be higher or lower than quantity demanded, but we can't compare demand and supply. 
Q8. The accompanying table is needed to answer this question.

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Comments

Assignment Expert
28.02.17, 18:29

Dear visitor,
please use panel for submitting new questions

Mahrukh Zaka
28.02.17, 18:07

in the corn market demand often exceeds supply and supply sometimes exceeds demand and the price of corn rises and falls in response to change in demand and supply in which of the following are the statement are the term supply and demand used correctly explain please can u help me out in this question I cant find answer to this question I need it urgently plz...

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