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Much of the demand for Canadian agricultural output has come

Paper help Economics Much of the demand for Canadian agricultural output has come

Economics

Much of the demand for Canadian agricultural output has come

Much of the demand for Canadian agricultural output has come from other countries. Suppose, in 2014,… Show more Much of the demand for Canadian agricultural output has come from other countries. Suppose, in 2014, the total demand for Canadian wheat was Q D = 3244 – 283p, where price is measured in dollars per bushel and quantities in millions of bushels per year. Of those, the demand of Canadian consumers was Q D CND = 1244 – 83p. The supply of Canadian wheat in 2014 was Q S = 1872 + 207p. a) Compute the equilibrium price of Canadian wheat in 2014. What was the total revenue of Canadian wheat farmers? Suppose the export demand for Canadian wheat expects to fall by 20% in 2015. On the other hand, the 2015’s demand of Canadian consumers and the supply of Canadian wheat remain the same as the 2014’s. b) By how much do you expect the total revenue of the wheat farmers fall this year? (Hint: To find the export demand for wheat, you subtract the demand of Canadian consumers Q D CND from the total demand Q D . c) Suppose now the Canadian government wants to buy enough wheat to raise the price to the 2014 level. How much wheat would the government have to buy? How much would this cost the government? • Show less

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