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The domestic demand (Opp) for wheat in the United States is estimated to be Opp 1430 - 55P where the quantity of wheat is measured in millions of bushels per year
The domestic demand (Opp) for wheat in the United States is estimated to be Opp 1430 - 55P where the quantity of wheat is measured in millions of bushels per year. Suppose China also demands U.S. wheat (Opc) and that is demand is given by Qoc = 950 - 50P What to the total demand for U.S. wheat, assuming the only two sources of demand are domestic and Chinese? The total demand for U.S. what is OA Op2380 - 105P for Ps $19 and Co - 950 - 50P for P>$19. OB. Qp-2360 -105P for Ps $26 and Qp = 960-50P for P>$26. OCQ 2380-105P for all P. D. Qp = 1430 - 55P for all P OE. Qp =2380 - 105P for Ps519 and Qp = 1430 - 56P for P> $19. norrow
Expert Solution
Option (E) ,
QD = 2380 - 105P for P≤ 19 and QD = 1430- 55P for P>19.
Is the correct answer .
Explanation -
QD = QDD + QDC
QD = 1430 - 55P + 950 - 50P
QD = 2380 - 105 P for P ≤ 19...... (1)
However, if we put price (P) greater than 19 in equation (1), the total demand will become negative which is not possible. Therefore, it will not export wheat to china in that case and it's demand for wheat will be :
QD =1430 - 55P for P>19 .
So, the option E is correct .
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