The Table Below Contains Information About The Wheat Market

The Table Below Contains Information About The Wheat Market Use It To

The table below contains information about the wheat market. Use it to answer the following questions: Wheat Market Price Per Bushel Quantity Demanded (bushels) Quantity Supplied (bushels) $5 30,000 0 $7 26,000 4,000 $10 22,000 9,000 $14 18,000 12,000 $17 15,000 15,000 $20 12,000 22,000 $23 8,000 28,000 $28 4,000 36,000 Plug the numbers in the chart into MS Excel and produce a Supply and Demand Chart, which you include with your answer sheet for submission. What are the equilibrium price and quantity of wheat? Suppose the prevailing price is $15 per bushel. Is there a shortage or a surplus in the market? Explain why. What is the quantity of the shortage or surplus? Show your calculations. How many bushels will be sold if the market price is $10 per bushel? Show calculations. If the market price is $14 per bushel, what must happen to restore equilibrium in the market? Explain. At what price will suppliers be able to sell 22,000 bushels of wheat? Explain what would have to happen. Suppose the market price is $25 per bushel. Is there a shortage or a surplus in the market? Why? Explain. What is the total quantity of the shortage or surplus? How many bushels will be sold if the market price is $24 per bushel? If the market price is $21 per bushel, what must happen to restore equilibrium in the market? Why should that happen?

Paper For Above instruction

The wheat market demonstrates fundamental economic concepts such as supply and demand, market equilibrium, shortages, surpluses, and price mechanisms. Analyzing the given data provides insight into how prices influence market behavior and equilibrium state, ensuring efficient resource allocation in agricultural markets.

Based on the provided data, the equilibrium price and quantity of wheat can be determined where the quantity demanded equals the quantity supplied. Observing the data, at a price of $17 per bushel, the quantity demanded is 15,000 bushels, and the quantity supplied is also 15,000 bushels. Therefore, the equilibrium price of wheat is $17 per bushel, with a corresponding equilibrium quantity of 15,000 bushels. This point represents a balance where producers are willing to supply the same quantity consumers are willing to purchase, resulting in market stability.

When the market price is $15 per bushel, the quantity demanded is 18,000 bushels, while the quantity supplied is 12,000 bushels. Since demand exceeds supply at this price, there is a shortage in the market. The shortage occurs because more consumers want to buy wheat at $15 than producers are willing to supply, signaling an imbalance that puts upward pressure on prices.

To quantify the shortage, subtract the quantity supplied from the quantity demanded: 18,000 - 12,000 = 6,000 bushels. This indicates a shortage of 6,000 bushels at the $15 price level. This shortage signals producers that prices are too low, encouraging them to increase supply or consumers to purchase less, ultimately driving the market toward a new equilibrium at a higher price.

When the price is $10 per bushel, the quantity demanded is 22,000 bushels, and the quantity supplied is 9,000 bushels. Since demand exceeds supply at this price, a significant shortage exists. The shortage here is 22,000 - 9,000 = 13,000 bushels. Given this disparity, only 9,000 bushels will be sold—the smaller of the two quantities—until the market adjusts to a higher price to eliminate the shortage.

To restore market equilibrium at the $14 price point, supply and demand must align. Currently, at $14, demand is 18,000 bushels, and supply is 12,000 bushels. To reach equilibrium, either the quantity demanded must decrease, or supply must increase. This can happen if prices rise slightly, prompting suppliers to produce more and reducing demand among consumers. Specifically, an increase in price from $14 to approximately $17 would align quantity demanded (15,000 bushels) with quantity supplied (15,000 bushels), restoring equilibrium.

Suppliers will be able to sell 22,000 bushels of wheat at a price of $20 per bushel, as that corresponds to the point in the data where quantity supplied matches 22,000 bushels. At this price point, demand is 12,000 bushels, which is less than supply, indicating a surplus. To sell 22,000 bushels, the market price would need to rise to at least $28, as per the data, where supply reaches 36,000 bushels, comfortably exceeding demand, thus creating a surplus. Alternatively, if prices are manipulated or market conditions change, a higher price would incentivize producers to supply more wheat, aligning sales with the targeted 22,000 bushels.

At a market price of $25 per bushel, the data indicates the supply quantity is 28,000 bushels, and the demand is 8,000 bushels. Since supply exceeds demand at this price, there is a surplus of 28,000 - 8,000 = 20,000 bushels. The surplus signifies excess wheat in the market, which tends to push prices downward toward the equilibrium to clear the excess stock.

The total quantity of wheat sold at $24 per bushel can be approximated by the lesser of the quantity demanded and supplied at that price. At $24, demand isn't provided exactly, but based on the trend, demand would be slightly less than at $23, where demand is 8,000 bushels, and supply exceeds demand at higher prices. Assuming demand decreases slightly as price increases, the quantity sold would be approximately 8,000 bushels, consistent with the demand at $23, unless new data suggest otherwise.

If the market price falls to $21 per bushel, the quantities demanded are expected to increase, but supply decreases accordingly. Since at $20 demand is 12,000 and supply is 22, the demand might rise to about 15,000 or more, while supply drops to around 17,000 or less, creating a shortage. To restore equilibrium at $21, prices may need to rise slightly above this level, encouraging producers to increase supply or demand to adjust accordingly. Ultimately, market forces will shift prices until the quantity demanded equals the quantity supplied, restoring balance and ensuring market efficiency.

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