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.
1 |
Market for organic wheatWhat will be the shortage/surplus at the original price of £200 per tonne? |
2 |