Figure 1 represents the supply and demand for barley in the United States. P₁ denotes the equilibrium (undistorted) price and Q₁ represents the equilibrium quantity. According to the barley farmers, P₁ is too low and the USDA has implemented a minimum price at P₂. For each situation, begin at the free market equilibrium point, and then implement the policy described in each section.

Figure 1. U.S. Barley Industry Price ($) Supply B (for the tiny k area here) Long Run Supply Le Support P r A I V H e P1 h n g X O P3 S d a Z f N P4 M C m L age PS T U V W Y Demand Q3 Q1 Q2 Q4 Q5 Quantity (Million pounds)Table 1: The Price Support and Government Purchase Scheme, sell surplus to outside market at Ps. Apply Support Price & Gov't Purchases Variable Starting New Change* Point Producer Price P 2 Consumer Price P Quantity Supplied Q Q 2 Quantity Demanded a Q Z T Producer Surplus xn sutv + X XV HAS HA Consumer Surplus Runs Kut # XXV HA Taxpayer Surplus tir,HA,ein, o - * Y. K, Kitin o i s g z FL d bim Total Economic Surplus Kins XXXX | +, e n o is g F (- ) 7 f L d b c m *For the Change column use a + or - to indicate if the prices and quantities went up (+) or down (-), and use the letters provided to indicate what happened to the area of Consumer Surplus, Producer Surplus, Taxpayer Surplus, and Total Economic Surplus Table 2: The Price Support and Government Purchase Scheme, Give away surplus as foreign aid Variable Starting Apply Support Price & Gov't Purchases Point New Change* Producer Price P 2 + Consumer Price PI PI Same Quantity Supplied Q , + Quantity Demanded Q Producer Surplus X, nis xin sutr + xrHA HA Consumer Surplus kut k vit Taxpayer Surplus trHAeast on 7 EL d bc m + 1 # , A c g J I Total Economic Surplus On Z FL JS L M kns kut XXXX feg JIor 2 f L 2 b c m V y w . R