P1 In 2010 the market demand for mielbleu honeyinfused blue

P1 In 2010, the market demand for mielbleu (honey-infused blue cheese) was Q4300 6P, and supply was Q, demand for mlelbleu rose to Qa -324-4P, while supply remained unchanged. The industry was always perfectly competitive 44 + 10P. After the visit of the French president in 2018. i) What was the equilibrium price in 2010? ii) How much mielbleu was sold in 2010? il) What was the equilibrium price in 2018? iv) How much mielbleu was sold in 2018? If, as a result of the French president\'s visit, imports of mielbleu increased and raised supply in the US, would the equilibrium price go up or down or stay the same as in part iv)? (Just answer \"up\" or \"down\" or \"same.\" v)

Solution

i) At equilibrium Qd= Qd for 2010

300-6P= 44+10P

P= 256/16= 16

ii) put P= 16 in either of the equations.

Q= 45+10(16)= 205

iii) for 2018 equilibrium equate new Qd and same supply equation.

324-4P= 44+10P

P= 20

iv) put P= 20 into any of the equation

Q= 44+10(20)= 244

v) above price is higher because there is excess demand. Demand has increased but there is no change in supply.

But now with supply been also higher there is no excess demand. This results in same price level.