Answered

Apply: The Fundamentals of Economics

The market supply of lettuce in a small town is shown in the table below.

Market Supply of Lettuce

[tex]\[
\begin{tabular}{|c|c|c|c|}
\hline
& \multicolumn{2}{|c|}{\begin{tabular}{c}
Quantity of Lettuce \\
Supplied (heads)
\end{tabular}} \\
\hline
\begin{tabular}{c}
Price \\
(dollars)
\end{tabular} & Initial & \multicolumn{2}{|c|}{ New } \\
\hline
$\$ 3.00$ & 320 & & \\
\hline
2.50 & 280 & & \\
\hline
2.00 & 240 & & \\
\hline
1.50 & 200 & & \\
\hline
1.00 & 160 & & \\
\hline
0.50 & 120 & & \\
\hline
\end{tabular}
\][/tex]

Instructions: Enter your answers as a whole number.

a. Suppose there is a decrease in the cost of renting land that allows lettuce growers to produce more lettuce at each price. Find the new quantities supplied at each price, and then complete the new supply schedule.

b. At a price of [tex]\$ 1.00[/tex] per head of lettuce, the original quantity supplied was 160 heads of lettuce. Suppose the new quantity supplied is 370 heads of lettuce.



Answer :

GinnyAnswer
To complete the new supply schedule given the changes in the market, let's proceed step-by-step based on the provided data and necessary calculations.

### Step-by-Step Solution:

#### Part (a): Finding New Quantities Supplied at Each Price

Here are the initial quantities supplied at various prices:

| Price (dollars) | Initial Quantity Supplied (heads) |
|------------------|------------------------------------|
| [tex]$3.00 | 320 | | $[/tex]2.50 | 280 |
| [tex]$2.00 | 240 | | $[/tex]1.50 | 200 |
| [tex]$1.00 | 160 | | $[/tex]0.50 | 120 |

Assuming that the new quantities supplied increase uniformly by 50 heads at each price, the computation would be as follows:

- At [tex]$3.00, new quantity: \(320 + 50 = 370\) - At $[/tex]2.50, new quantity: [tex]\(280 + 50 = 330\)[/tex]
- At [tex]$2.00, new quantity: \(240 + 50 = 290\) - At $[/tex]1.50, new quantity: [tex]\(200 + 50 = 250\)[/tex]
- At [tex]$1.00, new quantity: \(160 + 50 = 210\) - At $[/tex]0.50, new quantity: [tex]\(120 + 50 = 170\)[/tex]

Thus, the new quantities supplied at each price are as follows:

| Price (dollars) | New Quantity Supplied (heads) |
|------------------|------------------------------|
| [tex]$3.00 | 370 | | $[/tex]2.50 | 330 |
| [tex]$2.00 | 290 | | $[/tex]1.50 | 250 |
| [tex]$1.00 | 210 | | $[/tex]0.50 | 170 |

#### Part (b): Quantity Supplied at [tex]$1.00 after Market Increase With the initial price of $[/tex]1.00, the original quantity supplied was 160 heads. After the market change, the new quantity supplied at [tex]$1.00 became 210 heads (as computed above). However, due to an additional increase in market supply, this quantity rose further to 370 heads of lettuce. - The original quantity at $[/tex]1.00 was 160 heads.
- The new quantity at [tex]$1.00 with a uniform increase is 210 heads. - After a market increase, this new total quantity at $[/tex]1.00 is 370 heads.

### Completed New Supply Schedule

Here is the final completed table:

| Price (dollars) | Initial Quantity Supplied (heads) | New Quantity Supplied (heads) | New Total Quantity Supplied After Market Increase at [tex]$1.00 (heads) | |------------------|------------------------------------|------------------------------|-------------------------------------------------------------| | $[/tex]3.00 | 320 | 370 | |
| [tex]$2.50 | 280 | 330 | | | $[/tex]2.00 | 240 | 290 | |
| [tex]$1.50 | 200 | 250 | | | $[/tex]1.00 | 160 | 210 | 370 |
| $0.50 | 120 | 170 | |

Other Questions