Suppose that the market for milk can be represented by the following equations: Demand: P = 12 – 0.5QD Supply: P = 0.1QS where P is the price per gallon, and Q represents quantity of milk, represented in millions of gallons of milk consumed per day. a) Calculate the equilibrium price and quantity of milk. b) To help dairy farmers, the government sets a minimum price of K2.50 per gallon of milk. What is the new quantity of milk sold in the marketplace?
Suppose that the market for milk can be represented by the following equations: Demand: P = 12 – 0.5QD Supply: P = 0.1QS where P is the price per gallon, and Q represents quantity of milk, represented in millions of gallons of milk consumed per day. a) Calculate the equilibrium price and quantity of milk. b) To help dairy farmers, the government sets a minimum price of K2.50 per gallon of milk. What is the new quantity of milk sold in the marketplace?
Chapter4: Markets In Action
Section: Chapter Questions
Problem 1SQP
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- Suppose that the market for milk can be represented by the following equations:
Demand: P = 12 – 0.5QD
Supply: P = 0.1QS
- where P is the price per gallon, and Q represents quantity of milk, represented in millions of gallons of milk consumed per day.
- a) Calculate the
equilibrium price and quantity of milk. - b) To help dairy farmers, the government sets a minimum price of K2.50 per gallon of milk.
- What is the new quantity of milk sold in the marketplace?
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