7. Assume the market demand for bushels of corn is D: P = 1000 - QP and the market supply for corn is P = 160 +2Q³ a. Draw the market for corn. Be sure to label your curves, axes, and equilibrium. b. Calculate consumer surplus (CS) and producer surplus (PS) and indicate these areas on your graph from part a. Suppose the government implements a $760/bushel price floor at the behest of corn farmers. C. On the graph in part a, show the effect of the price floor. Calculate and clearly label the price and quantity with the price floor (PFLOOR and QFLOOR). I d. Calculate consumer surplus (CSFLOOR), producer surplus (PSFLOOR), and deadweight loss (DWL) with the price floor. Indicate these areas on the graph above.

7. Assume the market demand for bushels of corn is D: P = 1000 - QP and the market supply for corn is P = 160 +2Q³ a. Draw the market for corn. Be sure to label your curves, axes, and equilibrium. b. Calculate consumer surplus (CS) and producer surplus (PS) and indicate these areas on your graph from part a. Suppose the government implements a $760/bushel price floor at the behest of corn farmers. C. On the graph in part a, show the effect of the price floor. Calculate and clearly label the price and quantity with the price floor (PFLOOR and QFLOOR). I d. Calculate consumer surplus (CSFLOOR), producer surplus (PSFLOOR), and deadweight loss (DWL) with the price floor. Indicate these areas on the graph above.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 15PAE

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