Course: Microeconomics - Supply and Demand (Book Microeconomics - Robert Frank) Assume that demand is P = 600 - Q and supply is P = Q in the soybean market, where Q is expressed in tons of soybeans per year. The State sets a minimum price of P = US$ 500 per ton and buys the excess supply at that price. In response, farmers substitute soybeans for corn in the long run, raising the supply to P = Q/2.

Questions: (a) What is the difference between the excess supply that occurs as demand increases and the excess supply that existed before farmers switched crops? (b) How much more does the state have to spend to buy the excess supply?