PlotIT - Build a demand and supply diagram
The demand and supply schedules for organically grown wheat are shown in the following table. From it we can see that at a price of £200, farmers will produce (or plan to plant and produce) 220 tonnes per annum (p.a.); likewise consumers will buy 220 tonnes p.a. at this price. However, the price of non-organic wheat falls dramatically and is considerably cheaper than organic wheat. As a result the demand for organically grown wheat changes by 80 tonnes at all prices. Calculate the new level of demand at each price level. Jot this down on a piece of paper. You may like to check your answer.
|Price per tonne (£)||50||100||150||200||250||300||350|
|Tonnes supplied p.a.||100||140||180||220||260||300||340|
|Tonnes demanded p.a.||400||320||260||220||180||140||120|
|New tonnes demanded p.a|
In the diagram below plot the original supply and demand curves and the new demand curve given this change in the price of non-organic wheat.
You may like to check your answer to see if it matches the correct demand and supply curves.
Market for organic wheat
What will be the shortage/surplus at the original price of £200 per tonne?