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How do you solve economics equations to find out how to draw graphs?

Suppose demand is give by P = 300 – 0.5Q and supply is given by P = 0.5Q in the canola market, where Q is tones of canola per year. The government sets a price support at P = $300 / tone and purchase any excess supply at that price. In response, as a long run adjustment, farmers switch their crops from wheat to canola, expanding supply to P = 0.25Q.

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  • Anonymous
    1 decade ago
    Favorite Answer

    You can superimpose the second variable that is the production done in response to the incentive support price, on the original set of graph for the Demand and supply curves. This will show the impact of the support policy, as the area between the original graph and the new one.

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