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Problem 2.28 Consider the following sequence of events in the U.S. market for strawberries during the...

Problem 2.28

Consider the following sequence of events in the U.S. market for strawberries during the years 1998-2000:

  • 1998: Uneventful. The market price was $5 per bushel, and 4 million bushels were sold.
  • 1999: There was a scare over the possibility of contaminated strawberries from Michigan. The market price was $4.50 per bushel, and 2.5 million bushels were sold.
  • 2000: By the beginning of the year, the scare over contaminated strawberries ended when the media reported that the initial reports about the contamination were a hoax. A series of floods in the Midwest, however, destroyed significant portions of the strawberry fields in Iowa, Illinois and Missouri. The market price was $8 per bushel, and 3.5 million bushels were sold.

Find linear demand and supply curves that are consistent with this information.

Hint: shifts in supply will allow you to find the demand curve and shifts in demand will allow you to find the supply curve.

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Answer #1

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