You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce beans or groundnut using the same resources. Therefore, producers are able to sw itch from beans to groundnut production depending on market conditions. Consequently, Zokia consulted an Economist who estimated the demand function for beans as: Q b d = 600 – 4P b – 0.03M – 12P g + 15T + 6P e + 1.5N where Q b d is the quantity demanded of beans each month, ?? is the average price of beans (in Ghana Cedis) , M is the average household income (in GH¢) , ?? is the price of groundnut (in GH¢) , T is a consumer taste index ranging in value from 0 to 10 (the highest rating), ?? is the price (in GH¢) consumers expect to pay next month for beans , and N is the number of buyers in the market for beans . Assume the following initial values: ??=5, ??= 40, T= 6.5, P e = 5.25, N= 2000, Q b d = 2479 Explain to your Board of Directors why management should be worried about a rise in the price of groundnut.
You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce beans or groundnut using the same
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