seminar-type classess for сФ305

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a. Market equilibrium price and quantity:
The equilibrium occurs where quantity demanded equals quantity supplied. From the table:
At $3.25, Quantity Demanded = 1000 and Quantity Supplied = 1000.
Thus, equilibrium price = $3.25 and equilibrium quantity = 1000 bushels.

b. Plot is shown visually, but in this context the demand curve slopes downwards (quantity demanded increases as price decreases) and supply curve slopes upwards (quantity supplied decreases as price decreases), intersecting at the equilibrium point $3.25 and 1000 bushels.

c. At $3.75, a surplus exists because quantity supplied (1400) is greater than quantity demanded (900).

d. At $2.75, a shortage exists because quantity demanded (1100) is greater than quantity supplied (600).

e. Competitive markets are self-equilibrating means that any surplus or shortage causes prices to adjust. For example, a surplus lowers the price, encouraging more demand and less supply, whereas a shortage raises the price, encouraging less demand and more supply until the market reaches equilibrium.

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