Ag Bm 101 question: Graphing and Prices?
The U.S demand for tomato imports from Mexico: Q=24-P
The supply from Mexico: Q=6+P
$1=10 pesos
When I graph I get that 3 tomatos=$9 Us price, 90 pesos
Then we have to adjust for price when $1=5 pesos. I got $18.
However, if I put the Q given (for example 3) into the supply equation I get an entirely different set of numbers.
Anyone have a clue... a ton of people in my class are totally stumped.
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It is not clear whether the price P in your original equations are in pesos or dallars. In any case, I agree that P = 9 when supply equals demand. That corresponds to a quantity of 15, but I have no idea what the units of Q are. It could be thousands of tons per year. 9 pesos (90 cents) is typical of the price per pound these days, seasonally averaged at wholesale level. If a dollar were worth 5 pesos, and the same demand and supply equations applied in pesos, the price in dollars would be double.
1 answer