Consider that the market for soybeans is defined by the following demand and supply equations: QD = 200 - 10P and QS = 20P - 100,

where P is the price in dollars and Q measures the quantity in tons per quarter. The market is currently in equilibrium.

Consider that after much lobbying by the United Farmers Association, the government imposes a price control of $15 in this market, with no additional government support. Now, suppose that with the price control still in place, researchers in sustainable fuel create biodiesels made with soybean oils, and as a result, more and more firms are using this in the land transportation of their products.

One of the following equations most likely would represent the result of the event in the market for soybeans.

Equation A : 10P - 40

Equation B : 10P - 80

Equation C : 300 - 25P

Equation D : 600 - 20P

1. Consider that the market adjusts after the event. Describe the resulting market outcome.

Complete the sentences below by entering the letter representing one of the following phrases or a numerical value (zero is acceptable) in the blank spaces provided:

in the 1 st blank space: A = demand equation is | B = demand and supply equations are | C = supply equation is

in the 2nd blank space:

A = A | B = B | C = C | D = D | E = A and Equation C |F = A and Equation D|G= B and Equation C|H= B and Equation Din the 3rd and 4th blank spaces: a numerical value in the 5th blank space:

A = is binding | B = is no longer binding | C = is still effective

in the 6 th and 7 th blank spaces: a numerical value (zero is acceptable)

in the 8 th blank space: A = the efficient quantity | B = not the efficient quantity | C = the marginal benefit | D = the highest at the marginal cost

in the 9 th blank space: a numerical value

As a result of the biodiesel event, the new ___?______ Equation ___?____. The new equilibrium is defined by the price $___?___and the quantity __?____ tons per quarter. The price control ___?__ and as a result the current market price is $ ____?___and the quantity traded is___?______ tons per quarter. Furthermore, the quantity traded is ___?______ and the total surplus in the market is $ ____?______