Suppose That Demand and Supply in the Market for Brazil

question 22

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 Q^S 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 + 40P
• C) Q^s = 40P
• D) Q^s = -10 + 40P

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