Suppose the following are the supply and demand schedules for rice in India.

Demand Schedule for Rice

Price ($ per Pound)	Quantity Demanded (pounds/week)
0.50	700
1.00	500
1.50	300
2.00	100
2.50	0

Supply Schedule for Rice

Price ($ per pound)	Quantity Supplied (pounds/week)
0.50	100
1.00	200
1.50	300
2.00	400
2.50	500

1. Graph this market on a clearly labeled supply-demand diagram. Is there an equilibrium? If yes, what are the price and quantity? If no, please describe the relationship between quantity supplied and quantity demanded

2. Use the arc elasticity formula (i.e. the formula used in class to calculate percentage changes) to calculate the elasticity of demand and supply between each of the prices. Show your work.

3. Suppose an improved technology increases the capacity of the Indian rice market such that at each price the market can supply 300 more pounds per week at each price. Please re-evaluate your answer to part a.

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1 In following graph equilibrium is at point A where demand and supply curves intersect ... View the full answer