Suppose That Demand and Supply in the Market for Brazil $Q s = 30 + 40 P$

question 36

Multiple Choice

Suppose that demand and supply in the market for Brazil nuts is linear, with a historic market price of $.50 per pound and 10 million pounds sold. In 2004, a news item raised health fears about the nuts. That year, the market price fell to $.45 per pound and only 8 million pounds traded. An estimate for the equation of the supply of Brazil nuts (where QS is in millions of pounds and P is in dollars) would be:

• A) This information only relates to demand, and so cannot be used to generate a supply equation.
• B) \(Q s = 30 + 40 P\)
• C) \(\mathrm { Qs } = 40 \mathrm { P }\)
• D) \(Q s = - 10 + 40 P\)

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Definitions:

Mailbox Rule

A legal principle stating that an offer is considered accepted once the acceptance is dispatched, not when it is received by the offeror.

Acceptance

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An agreement to the terms of an offer in contract law, which results in a binding contract between the parties.

Valid Offer

A proposal made by one party to another intending to create a legally binding agreement that is specific, definitive, and capable of acceptance.