Equilibrium price of wheat. Please help.?

Question

Please help me answer two questions listed below. More importantly i need to understand HOW to solve this... Many thanks for your help.

- Brittany

A)What is the equilibrium price of wheat in the market?

B)How much wheat will be produced at equilibrium in this market?

Price----- Market demand-----Market Supply

$1-------- 800 ----------100

$2-----------750------------ 225

$3--------- 667---------- 300

$4-------- 600------- ---420

$5------- 540--------475

$6------- 525----- 525

$7-------- 480--------600

Answer 1

The equilibrium price and quantity is found where market demand is equal to market supply. In this case, that is at $6, where demand is 525 and supply is also 525. This makes sense because at that price, consumers will be willing and able to buy all the products that producers are willing and able to supply.

To find how much wheat will be produced, just look at the market supply at equilibrium, which in this case is 525.

Answer 2

Price--Market demand--Market Supply

$1---------800----------100

$2---------750----------225

$3---------667----------300

$4---------600----------420

$5---------540----------475

$6---------525----------525 << Equilibrium price and quantity.

$7---------480----------600