8.) The graph below depicts the market for oranges at a local farmers\' market.

Question

8.) The graph below depicts the market for oranges at a local farmers' market.

* I don't know if I correctly labeled the x's, and y's. I noticed that on my homework questions that the x's and y's are switched on the graph. I dont remember if its a rule in economics, that they switch when it comes to graphing. I'm having trouble with uploading the pic. The supply looks as if its increasing and the demand is decreasing.)

*the dollars are labeled for the vertical side and the quantity is labeled for the horizontal side

Supply

x: 60, 80, 100, 120

y: 0.30, 0.50, 0.70, 0.90

Demand

x: 60, 80, 100, 120, 140, 180

y: 0.90, 0.80, 0.70, 0.60, 0.50, 0.30

Instructions: Enter your answers as a whole number.

a. If a producer tries to sell oranges at a price of $0.40 per pound, what will be the quantity demanded and quantity supplied at this price?

     Qd = ___ pounds of oranges

     Qs = ___ pounds of oranges

b. Determine whether there is a surplus or a shortage at a price of $0.40 per pound, and determine the size of the surplus or shortage.

     At this price, there will be a (shortage or surplus) of ___ pounds of oranges.

Explanation / Answer

a) P = $ 0.4

Qd = 160 pounds of oranges and Qs = 70 pounds of oranges (using interpolation)

b)  At this price, there will be a shortage of 90 pounds of oranges. (Qd > Qs, shortage = Qd - Qs)

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