discussion 4206

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Assume that at a price of $2.00 per pound, the annual supply of coffee beans in Country A is 8 million pounds, while the demand is 10 million pounds. At a price of $3.00 per pound, the supply is 10.2 million pounds, and the demand is 8.6 million pounds. Assume that the price-supply and price-demand equations are linear.

  1. Write an equation for each (price on the y-axis)
  2. Find the equilibrium point (point of interception of the two linear equations)
  3. Discuss the significance of the equilibrium point in this case
  4. Graph the two equations in the same Cartesian system (upload)