Question

2 A) If the supply function of rice from the United States is Q. a + bp, and the supply function from the rest of the world is Qr c ep, where a, b, c, and e are positive constants. what is the world supply curve? B) The estimated Canadian processed pork demand function (Moschini and Meilke, 1992) is Q 171-20p + 20Pg + 3 + 2Y, and the supply function is Q 178 40P 60Ph. Solve for the equilibrium price and quantity in terms of the price of hogs, Br the price of beef, p, the price of chicken, R; and income, Y. 11A-1.5 (dollars per kg), P 4 (dollars per kg), P -3 (dollars per kg), and Y- 12.5 (thousands of dollars), what are the equilibrium price and quantity?

Answer 1

Q_us = a + b p (united states supply) Q_r = c + ep (Row supply) Q = Q_w + q_r (Q is world supply) Q = a + b p + c + ep Q = a + c + bp + ep Q = a + c + (b + c) Q = (a + c) + (b + e) p (B) Q = 171 - 20 p + 20 pb + 3 pc + 2f Q = 178 + 40 p - 60 ph (supply Demand) At equilibrium supply = Demand 171 - 20 p + 20 pb + 3 pc + 2y = 178 + 40 p - 60 pb 171 + 20 pb + 3 pc + 2y - 178 + 60 pb = 40 p + 20 p -7 + 80 pb + 3 pc + 2y = 60 p p = (80 pb + 3 pc + 2y - 7)/60