The wheat market is perfectly competitive and the market supply and demand curves are given by the following equations: QD = 20,000,000 - 4,000,000P QS = 7,000,000 + 2,500,000P,where QD and QS are quantity demanded and quantity supplied measured in kilogram (kg), and P = price per kg. question: a) Assume that the government has imposed a price floor at $2.25 per kg and agrees to buy any resulting excess supply. How many quantity (kg) of wheat will the government be forced to buy? Determine consumer surplus with the price floor

The wheat market is perfectly competitive and the market supply and demand curves are given by the following equations: QD = 20,000,000 - 4,000,000P QS = 7,000,000 + 2,500,000P,where QD and QS are quantity demanded and quantity supplied measured in kilogram (kg), and P = price per kg. question: a) Assume that the government has imposed a price floor at $2.25 per kg and agrees to buy any resulting excess supply. How many quantity (kg) of wheat will the government be forced to buy? Determine consumer surplus with the price floor

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

ChapterP2: Microeconomics Fundamentals

Section: Chapter Questions

Problem 2KC

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The wheat market is perfectly competitive, and the market supply and demand curves are given by the following equations: QD = 20,000 - 4,000P QS = 7,000 + 2,500 P where QD and QS are quantity demanded and quantity supplied measured in bushels, and P = price per bushel. a. Determine the equilibrium price and quantity. b. Determine the Consumer surplus c. Assume that the government has imposed a price floor at $2.25 per bushel and agrees to buy any resulting excess supply. How many bushels of wheat will the government be forced to buy? Determine consumer surplus with the price floor.
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