Chapter 1. eFigure 2.9

eFigure
Isoquants
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You must read each slide, and complete any questions on the slide, in sequence.
E-Figure Title
Question 1 of 4

Question 1.

The graph presents the supply and demand curves for tomatoes and the equilibrium point, E1. Given the information in the graph, please determine the equations for the demand curve (QD) and supply curve (QS) in the market for tomatoes.

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B.
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D.

100
Correct! The graph allows us to calculate the slope of the demand curve as -1/200, rise over run. We also recognize that the intercept along the horizontal axis is 1000. In addition, we know several points that are on the curve: at a price of $5, no tomatoes are demanded; at a price of $1, 400 tomatoes are demanded; at a price of $4, 200 tomatoes are demanded. Capturing this information in the equation for a line and expressing QDas a function of price, we find QD= 1000 – 200P. In like manner, the slope of the supply curve is 1/200 and the intercept on the horizontal axis is -200. We also know several points along the supply curve: at a price of $1, no tomatoes are supplied; at a price of $2, 200 tomatoes are supplied. Again, capturing this information in the equation for a line and expressing QS as a function of price, we find QS = 200P – 200.
Incorrect. The graph allows us to calculate the slope of the demand curve as -1/200, rise over run. We also recognize that the intercept along the horizontal axis is 1000. In addition, we know several points that are on the curve: at a price of $5, no tomatoes are demanded; at a price of $1, 400 tomatoes are demanded; at a price of $4, 200 tomatoes are demanded. Capturing this information in the equation for a line and expressing QDas a function of price, we find QD= 1000 – 200P. In like manner, the slope of the supply curve is 1/200 and the intercept on the horizontal axis is -200. We also know several points along the supply curve: at a price of $1, no tomatoes are supplied; at a price of $2, 200 tomatoes are supplied. Again, capturing this information in the equation for a line and expressing QS as a function of price, we find QS = 200P – 200.