Suppose that the supply schedule of Brazilian Coffee beans is as follows:
Price of Brazilian Coffee beans
(per pound)
Quantity of Brazilian Coffee beans supplied
(pounds)
$4.00
6,000
$3.50
5,000
$3.00
4,000
$2.50
3,000
$2.00
2,000
Suppose that Brazilian Coffee beans can be sold only in Brazil. The domestic Brazilian demand schedule for Brazilian Coffee beans is as follows:
Price of Brazilian Coffee beans
(per pound)
Brazilian Quantity of Brazilian Coffee beans demanded
(pounds)
$4.00
1,000
$3.50
2,500
$3.00
4,000
$2.50
5,000
$2.00
7,000
a. Below is the graph of the domestic Supply and Demand (Graph 2.a.) for Brazilian Coffee beans. From the supply and demand schedules above, what are the equilibrium price and quantity of Brazilian Coffee beans?

Now suppose that Brazilian Coffee beans can also be sold in Canada. The Canadian demand schedule for Brazilian Coffee beans is as follows:
Price of Brazilian Coffee beans
(per pound)
Canadian Quantity of Brazilian Coffee beans demanded
(pounds)
$4.00
1,000
$3.50
2,500
$3.00
3,000
$2.50
5,000
$2.00
5,500
b. Complete the following table by inserting the total Brazilian Coffee beans demanded by both the Brazilians and Canadians at each price (the combined (total) demand schedule for Brazilian Coffeebeans).
Price of Brazilian Coffee beans
Canadian Quantity of Brazilian Coffee beans demanded
Brazilian Quantity of Brazilian Coffee beans demanded
Total Brazilian Coffee Demanded
(per pound)
(pounds)
(pounds)
(pounds)
$4.00
1,000
1,000

$3.50
2,500
2,500

$3.00
3,000
4,000

$2.50
5,000
5,000

$2.00
5,500
7,000

Below is the new Supply and Demand graph (Graph 2.b.) that illustrates the equilibrium price and quantity of Brazilian Coffee beans.

c. From the supply schedule and the combined Canadian and Brazilian demand schedule, what will be the new price at which Brazilian coffee growers can sell Brazilian Coffee beans?
d. With the Brazilian coffee growers sellingto both the Canadians and the Brazilians, what price will be paid by Brazilian consumers?
e. With the Brazilian coffee growers selling to both the Canadians and the Brazilians, what will be the quantity consumed by Brazilian consumers?

Transcribed Image Text:

Graph 2.a. - Brazilian Supply(S) and Brazilian Demand (Dg) for Brazilian Coffee Beans $7.00 $6.50 $6.00 $5.50 $5.00 D. $4.50 $4.00 Price $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 De 1000 2000 4000 8000 Quantity 11000 3000 5000 6000 7000 9000 10,000 12,500 Graph 2.b. - Brazilian Supply(S), Brazilian Demand (D,) and combined Brazilian and Canadian (DCHB) for Brazilian Coffee Beans $5.00 DcB $4.50 D. $4.00 $3.50 $3.00 Price $2.50 $2.00 $1.50 De8 $1.00 s $0.50 $0.00 De 200 8000 Quantity 11000 12,500 000'ot 0006 000L 0009 000s 000 0008 0007 000T