Question

Micro-Ecom Instructions: Answer ONE question. Eac question is worth 1. In the banana market, the price per pound is $2.00 1 120bs and the quantity supplied is 20lbs. It is predicted that every increase in price quantity demand decrease by 201b increase by 30lb. and quantity supplied a) Construct the market schedule for banan $200 to $3.00 b) Plot the graph to depict the market schedule for banana. c) Describe the banana market condition when the price is $3.00 d) Explain how a price ceiling of $5.00 would affect the market for banar e) Assuming the market is at equilibrium, show how technological advancement relating to banana production would affect the banana market. a using the price range from a.

Answer 1

a)
Price per pound $	Quantity demanded (lbs)	Quantity supplied (lbs)
2.00	120	20
3.00	100	50
4.00	80	80
5.00	60	90
c)
When price is $3.00 per lbs, quantity demanded will be 100 lbs and quantity supplied will be 80 lbs, creating a shortage of 20 lbs.
d)
When there is a price ceiling of $5.00 per lbs, then quantity supplied will be 90 lbs and quantity demanded will be 60 lbs, causing a surplus of 30 lbs.
e)
The improvement in productivity would increase the supply of bananas, causing an increase in equilibrium quantity and fall in equilibrium price. The supply curve will shift to the right.
barara Market b) 2 1.00