Question: problem 228 consider the following sequence of events in the...
Consider the following sequence of events in the U.S. market for strawberries during the years 1998-2000:
- 1998: Uneventful. The market price was $5 per bushel, and 4 million bushels were sold.
- 1999: There was a scare over the possibility of contaminated strawberries from Michigan. The market price was $4.50 per bushel, and 2.5 million bushels were sold.
- 2000: By the beginning of the year, the scare over contaminated strawberries ended when the media reported that the initial reports about the contamination were a hoax. A series of floods in the Midwest, however, destroyed significant portions of the strawberry fields in Iowa, Illinois and Missouri. The market price was $8 per bushel, and 3.5 million bushels were sold.
Find linear demand and supply curves that are consistent with this information.
Hint: shifts in supply will allow you to find the demand curve and shifts in demand will allow you to find the supply curve.