Question
Demand and supply in the wheat market are given by: QD = 2000 - 1000 P and QS = -500 + 1000 P where Q
Demand and supply in the wheat market are given by:
QD = 2000 - 1000 P and QS = -500 + 1000 P
where Q is millions of bushels and P is price per bushel.
a. Find the equilibrium price and quantity.
b. Suppose that the government wishes to support farm income and thus sets a price floor of $1.50/bushel. Find the size of the farm surplus.
c. What is the cost of this program to the government?
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The Economics Of The Environment
Authors: Peter Berck, Gloria Helfand
1st Edition
978-0321321664, 0321321669
