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Suppose that we have the following information about wheat production:

1. Sketch out the demand/supply for wheat.

2. Suppose that we have the following information about wheat production:

\begin{tabular}{|l|l|l|}
\hline Producer & Capacity & Cost per bushel \\
\hline 1 & 100 & \[tex]$3 \\
\hline 2 & 300 & \$[/tex]4 \\
\hline 3 & 200 & \[tex]$5 \\
\hline 4 & 400 & \$[/tex]6 \\
\hline
\end{tabular}

Further, we also have some consumer information:

\begin{tabular}{|l|l|l|}
\hline Consumer & Reservation Price & Wheat Purchases \\
\hline 1 & \[tex]$2 & 50 \\
\hline 2 & \$[/tex]3 & 40 \\
\hline 3 & \[tex]$4 & 20 \\
\hline 4 & \$[/tex]5 & 40 \\
\hline 5 & \[tex]$6 & 30 \\
\hline 6 & \$[/tex]7 & 30 \\
\hline
\end{tabular}



Answer :

GinnyAnswer
To address the given problem step-by-step, let's analyze the producer and consumer information for wheat, aiming to understand the supply and demand dynamics of this market.

### Producer Information (Supply Side)

Here is a table summarizing the production capacity and cost per bushel for each producer:

| Producer | Capacity (Bushels) | Cost per Bushel |
|----------|---------------------|-----------------|
| 1 | 100 | [tex]$3 | | 2 | 300 | $[/tex]4 |
| 3 | 200 | [tex]$5 | | 4 | 400 | $[/tex]6 |

### Consumer Information (Demand Side)

Here is a table summarizing the reservation price and the amount of wheat each consumer is willing to purchase:

| Consumer | Reservation Price (Per Bushel) | Wheat Purchases (Bushels) |
|----------|--------------------------------|---------------------------|
| 1 | [tex]$2 | 50 | | 2 | $[/tex]3 | 40 |
| 3 | [tex]$4 | 20 | | 4 | $[/tex]5 | 40 |
| 5 | [tex]$6 | 30 | | 6 | $[/tex]7 | 30 |

### Understanding Supply and Demand

#### Supply Curve
The supply curve represents the relation between the price of the good and the quantity supplied. In this case:
- At [tex]$3 per bushel, 100 bushels are supplied. - At $[/tex]4 per bushel, 400 (100 from Producer 1 + 300 from Producer 2) bushels are supplied.
- At [tex]$5 per bushel, 600 (400 + 200 from Producer 3) bushels are supplied. - At $[/tex]6 per bushel, 1000 (600 + 400 from Producer 4) bushels are supplied.

#### Demand Curve
The demand curve represents the relation between the price of the good and the quantity demanded. In this case:
- At [tex]$2 per bushel, 50 bushels are demanded. - At $[/tex]3 per bushel, 90 (50 from Consumer 1 + 40 from Consumer 2) bushels are demanded.
- At [tex]$4 per bushel, 110 (90 + 20 from Consumer 3) bushels are demanded. - At $[/tex]5 per bushel, 150 (110 + 40 from Consumer 4) bushels are demanded.
- At [tex]$6 per bushel, 180 (150 + 30 from Consumer 5) bushels are demanded. - At $[/tex]7 per bushel, 210 (180 + 30 from Consumer 6) bushels are demanded.

### Illustrating the Demand and Supply

Although sketching the curves requires graphical tools, here's how one might visualize the data.

#### Supply Curve
- Starts at [tex]$3 and 100 bushels. - Increases as more producers are willing to supply wheat: - $[/tex]4 per bushel corresponds to 400 bushels,
- [tex]$5 per bushel corresponds to 600 bushels, - $[/tex]6 per bushel corresponds to 1000 bushels.

#### Demand Curve
- Starts at [tex]$2 and 50 bushels. - Increases as more consumers are willing to pay: - $[/tex]3 per bushel corresponds to 90 bushels,
- [tex]$4 per bushel corresponds to 110 bushels, - $[/tex]5 per bushel corresponds to 150 bushels,
- [tex]$6 per bushel corresponds to 180 bushels, - $[/tex]7 per bushel corresponds to 210 bushels.

To better understand the equilibrium point where supply meets demand, the supply and demand curves would typically be plotted on the same graph, plotting price (y-axis) against quantity (x-axis). The intersection of these curves would indicate the market equilibrium price and quantity for wheat.

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