11. The U.S. Department of Agriculture guarantees dairy producers that they will receive at least $1.00 per poundfor butter they supply to the market. Below is the current monthly demand and supply schedules for wholesale butter (in millions of pounds per month).

Market for Wholesale Butter

Price (dollars per pound)	Quantity of Butter Demanded (millions of pounds)	Quantity of Butter Supplied (millions of pounds)
$0.80	107	63
0.90	104	71
1.00	101	79
1.10	98	87
1.20	95	95
1.30	92	103
1.40	89	111
1.50	86	119
1.60	83	127
1.70	80	135
1.80	77	143

Instructions:Round your answer for price to 2 decimal places. Enter your answers for quantity as a whole number.

a. What are the equilibrium price and quantity in the wholesale butter market?

P= $____ per pound

Q= ____ million pounds

b. What is the monthly surplus created in the wholesale butter market due to the price support (price floor) program?

multiple choice 1

• 11 million pounds
• 79 million pounds
• 22 million pounds
• Zero

Suppose that a decrease in the cost of feeding cows shifts the supply schedule to the right by 40 million pounds at every price.

c. Fill in the new supply schedule given the change in the cost of feeding cows.

Market for Wholesale Butter

Price (dollars per pound)	Quantity of Butter Demanded (millions of pounds)	Initial Quantity of Butter Supplied (millions of pounds)	New Quantity of Butter Supplied (millions of pounds)
$0.80	107	63
0.90	104	71
1.00	101	79
1.10	98	87
1.20	95	95
1.30	92	103
1.40	89	111
1.50	86	119
1.60	83	127
1.70	80	135
1.80	77	143

d. Given the new supplyof butter, what is the monthly surplus of butter created by the price support program?

multiple choice 2

• 29 million pounds
• 18 million pounds
• 22 million pounds
• Zero