Suppose the graph below represents the demand and supply for rice at various prices, answer the questions
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Question:
Suppose the graph below represents the demand and supply for rice at various prices, answer the questions that follow.
- The graph above is represented in the table below. Please complete the table below identifying the shortage or surplus.
Price (10kg bag) | Demand (10 kg bags) | Supply (SS) (10 kg bags) | Surplus (+) Shortage (-) |
10 | 89 | 29 | |
20 | 70 | 40 | |
30 | 55 | 55 | |
40 | 39 | 67 | |
50 | 25 | 80 | |
60 | 11 | 95 |
- Based on your findings in the table above, what is the market equilibrium price and quantity for rice? (3 marks)
- Also, please examine the factors that can motivate the government to reduce the price of rice at $20 per 10 kg bag and the effects of that government legislation on the rice market. (7marks)
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