2.Suppose demand is Qd = 21,000 - 20P and supply is Qs = -1,000 + 30P in the sugar market, where Q is tons of sugar per year. The government sets a price floor at P = $600 per ton and buys the excess supply at the price of $600 per ton.

(a) How much does the government have to spend to buy the surplus?

(b) In response, as a long-run adjustment farmers switch from other crops to sugar, expanding supply to Qs = - 70 + 3P. Demand remains the same.What would be the percentage increase in government spending?