The Total Demand for Wheat in the U

question 113

Multiple Choice

The total demand for wheat in the U.S. is given by Qd = 1,750 − 130P. Domestic supply is given by, Qs = 1,000 + 170P. Price is measured in dollars/ton and quantity is measured in thousands of tons. The equilibrium price and quantity of wheat are:

• A) $4.78 a ton and 1,129 thousands of tons, respectively.
• B) $4.78 a ton and 1,813 thousands of tons, respectively.
• C) $2.50 a ton and 2,075 thousands of tons, respectively.
• D) $2.50 a ton and 1,425 thousands of tons, respectively.

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Definitions:

Merchandise Inventory

Goods a business has acquired to sell to customers but has not yet sold.

Cash Equivalent

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Certificate of Deposit

A savings certificate issued by a bank to a person depositing money for a specified length of time, typically earning a fixed interest rate.

Treasury Bills

Short-term government securities issued at a discount from the face value and mature in a year or less, offering a secure, low-risk investment option.