In august, Canadians can buy corn on the cob for $3.5 per package. In the winter, corn packages sell for $11 per package.

1. Explain (with words + graph) the seasonal increase in corn prices.

Why does the govt not attempt to protect consumers against such price increases by placing maximum legal price on corn? Show the effect that a legal limit on prices in the winter would have on this market. What potential problems this could create? Explain with words + graph (use and show on the same graph you drew in part a)).

Part B:

Consider the following businesses: e-business, who produce and sell electronic products such as software and games; factory, producing a commodity good like wheat.

If demand rose in each of the above markets, which would be more likely to increase more sharply: the price of software and games or the price of wheat? Why? Explain thoroughly (with words only, no graph needed).