Supply and Demand Analysis for Wheat

What are the daily supply and demand quantities for wheat at $0.42 per bushel and $0.92 per bushel?

What is the price-supply equation for wheat?

Daily Supply and Demand Quantities

At $0.42 per bushel, the daily supply for wheat is 440 bushels while the daily demand is 568 bushels. When the price is raised to $0.92 per bushel, the daily supply increases to 540 bushels, and the daily demand decreases to 318 bushels.

Price-Supply Equation

To find the price-supply equation, we need to determine the relationship between the price and the quantity supplied. The equation for the price-supply can be calculated using the given data points.

Daily Supply and Demand Analysis

From the data provided, we can see that as the price of wheat increases from $0.42 to $0.92 per bushel, the daily supply of wheat also increases from 440 to 540 bushels, while the daily demand decreases from 568 to 318 bushels. This demonstrates the inverse relationship between price and quantity demanded, as well as the positive relationship between price and quantity supplied.

Calculating the Price-Supply Equation

To find the price-supply equation, we can use the point-slope form: y - y1 = m(x - x1), where (x1, y1) is a point on the line and m is the slope.

Given the data points (0.42, 440) and (0.92, 540), we can calculate the slope as follows:

Slope (m) = (540 - 440) / (0.92 - 0.42) = 100 / 0.5 = 200

Substitute the slope and a point into the point-slope form to find the price-supply equation:

y - 440 = 200(x - 0.42)

Simplify the equation to obtain the price-supply equation: y = 200x - 68.4

Therefore, the price-supply equation for wheat is y = 200x - 68.4, where y represents the price per bushel and x represents the quantity supplied.