Consider supply and demand schedules for Alaska Salmon indicated in the following tables to answers questions from a –d below.
|
Price of Salmon per Pound |
Quantity of Salmon Supplied (pounds) |
|
$30 |
900 |
|
$25 |
700 |
|
$20 |
600 |
|
$15 |
300 |
|
$10 |
100 |
First, assume that Alaskan Salmon can be sold only in the United States. The U.S. demand schedule is as follows:
|
Price of Salmon per Pound |
USA Quantity of Salmon Demanded (pounds) |
|
$30 |
100 |
|
$25 |
300 |
|
$20 |
600 |
|
$15 |
700 |
|
$10 |
900 |
a. Referring to the schedules of supply and demand, what is the equilibrium price of Salmon? What is the equilibrium quantity of salmon demanded and supplied at the equilibrium price?
$20.00 is the equilibrium price of salmon. The equilibrium quantity is 600
b. Second, assume that Alaskan Salmon can also be sold in UK. The UK demand schedule for salmon is as follows:
|
Price of Salmon per Pound |
Quantity of Salmon Demanded (pounds) |
|
$30 |
200 |
|
$25 |
400 |
|
$20 |
500 |
|
$15 |
700 |
|
$10 |
900 |
What is the combined demand schedule for Alaskan salmon after the UK consumers join the market for Alaskan salmon? I do not really understand this question
c. Refer to the combined U.S. and UK demand schedule, the U.S. demand schedule and the supply schedule, and analyze the change in the market for salmon .What will happen to the price at which fishermen can sell salmon? What will be the final output of salmon?
I really do not understand this question
