Much of the demand for U.S. agricultural output has come from other countries. In 1998, the total demand for wheat was Q = 3,244 - 283P. Of this, total domestic demand was Qp = 1700 - 107P, and domestic supply was Qs = 1,944 + 207P. Suppose the export demand for wheat falls by 50 percent. J.S. farmers are concerned about this drop in export demand. What happens to the free-market price of wheat in the United States? The free-market price of wheat in the United States after the drop in export demand is $ 1.31. (Enter your response rounded to two decimal places.) Do famers have much reason to worry? O A. Farmers have reason to worry because the equilibrium quantity decreases from 3,492.55 million bushels to 2,215.17 million bushels. O B. Farmers have reason to worry because the market price for wheat decreases from $3.65 per bushel to $1.31 per bushel. O C. Farmers have no reason to worry because the equilibrium quantity decreases from 2,592.55 million bushels to 2,215.17 million bushels. O D. Farmers have no reason to worry because the market price for wheat decreases from $1.34 per bushel to $1.31 per bushel. O E. Farmers have reason to worry because total revenue from wheat decreases from $6,605.26 million to $2,901.87 million.
Much of the demand for U.S. agricultural output has come from other countries. In 1998, the total demand for wheat was Q = 3,244 - 283P. Of this, total domestic demand was Qp = 1700 - 107P, and domestic supply was Qs = 1,944 + 207P. Suppose the export demand for wheat falls by 50 percent. J.S. farmers are concerned about this drop in export demand. What happens to the free-market price of wheat in the United States? The free-market price of wheat in the United States after the drop in export demand is $ 1.31. (Enter your response rounded to two decimal places.) Do famers have much reason to worry? O A. Farmers have reason to worry because the equilibrium quantity decreases from 3,492.55 million bushels to 2,215.17 million bushels. O B. Farmers have reason to worry because the market price for wheat decreases from $3.65 per bushel to $1.31 per bushel. O C. Farmers have no reason to worry because the equilibrium quantity decreases from 2,592.55 million bushels to 2,215.17 million bushels. O D. Farmers have no reason to worry because the market price for wheat decreases from $1.34 per bushel to $1.31 per bushel. O E. Farmers have reason to worry because total revenue from wheat decreases from $6,605.26 million to $2,901.87 million.
Chapter3: Supply And Demand: Theory
Section: Chapter Questions
Problem 24QP
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Transcribed Image Text:Much of the demand for U.S. agricultural output has come from other countries. In 1998, the total demand for wheat was
Q = 3,244 - 283P.
Of this, total domestic demand was
Qn = 1700 - 107P,
and domestic supply was
Qs = 1,944 + 207P
Suppose the export demand for wheat falls by 50 percent.
U.S. farmers are concerned about this drop in export demand. What happens to the free-market price of wheat in the United States?
The free-market price of wheat in the United States after the drop in export demand is $1.31. (Enter your response rounded to two decimal places.)
Do famers have much reason to worry?
O A. Farmers have reason to worry because the equilibrium quantity decreases from 3,492.55 million bushels to 2,215.17 million bushels.
O B. Farmers have reason to worry because the market price for wheat decreases from $3.65 per bushel to $1.31 per bushel.
OC. Farmers have no reason to worry because the equilibrium quantity decreases from 2,592.55 million bushels to 2,215.17 million bushels.
O D. Farmers have no reason to worry because the market price for wheat decreases from $1.34 per bushel to $1.31 per bushel.
O E. Farmers have reason to worry because total revenue from wheat decreases from $6,605.26 million to $2,901.87 million.
Now suppose the U.S. government wants to buy enough wheat to raise the price to $4.50 per bushel. With the drop in export demand, who much wheat would the govemment have to buy?
The government would have to buy million bushels. (Enter your response rounded to two decimal places.)
How much would this cost the government?
This would cost the government $ million dollars. (Enter your response rounded to two decimal places.)
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