In this problem we have considered two government schemes: A price floor is established and the government purchases any excess output and The government buys all the farmers' output at the floor price and resells at whatever price it can get. Which scheme will taxpayers prefer? Consider again the two schemes. Which scheme will the farmers prefer? Consider again the two schemes. Which scheme will corn buyers prefer?

Microeconomics A Contemporary Intro
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Chapter5: Elasticity Of Demand And Supply
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  1. In this problem we have considered two government schemes:
    1. A price floor is established and the government purchases any excess output and
    2. The government buys all the farmers' output at the floor price and resells at whatever price it can get. Which scheme will taxpayers prefer?
  2. Consider again the two schemes. Which scheme will the farmers prefer?
  3. Consider again the two schemes. Which scheme will corn buyers prefer?
 
Table 4-5 below contains information about the corn market. An agricultural price floor is a price that the government guarantees
farmers will receive for a particular crop. Suppose the federal government sets a price floor for corn at $12 per bushel.
Price per Bushel
(dollars)
$2
Quantity Demanded (bushels) Quantity Supplied (bushels)
40,000
4
34,000
4,000
28,000
8,000
8
24,000
16,000
10
20,000
20,000
12
18,000
28,000
36,000
14
12,000
16
6,000
40,000
Transcribed Image Text:Table 4-5 below contains information about the corn market. An agricultural price floor is a price that the government guarantees farmers will receive for a particular crop. Suppose the federal government sets a price floor for corn at $12 per bushel. Price per Bushel (dollars) $2 Quantity Demanded (bushels) Quantity Supplied (bushels) 40,000 4 34,000 4,000 28,000 8,000 8 24,000 16,000 10 20,000 20,000 12 18,000 28,000 36,000 14 12,000 16 6,000 40,000
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