Answer to Question #93190 in Microeconomics for malebo

Question

A small town produces good quality maize. Let us consider a market for the maize produced here. The farmers in this town distribute and sell their produce to three retail stores in the nearby city: Company A, Company B and Company C.

• The market supply for maize is given as Qs = 14 000 + 17.5p.
• The demand curves for maize by Companies A, B and C are respectively:
Qd = 40 000 – 12.5p; Qd = 30 000 – 5p; and Qd = 20 000 – 3p.
Make use of a graph to illustrate the market demand and market supply
for maize on the same set of axes. (4

Answer 1

Market demand is illustrated as a downward-sloping curve, and market supply of maize is illustrated as upward-sloping curve. They intersect in equilibrium point, at which Qd = Qs.