Market supply for soybeans is given by P =100+Q and market demand for soybeans is given by P =1100Q .

a. Calculate the equilibrium price and quantity of soybeans.

b. Calculate consumer surplus and producer surplus. To support soybean farmers, the government introduces a price floor of 700.

c. Briefly explain why a government-mandated price floor would be ineffective if set below the market equilibrium price.

d. Calculate the quantity supplied and the quantity demanded created by the government's price-floor policy and determine whether there is excess supply or excess demand and how much.

e.Assume that the government agrees to buy up any surplus that may be created by its price-floor policy at the floor price. Calculate consumer surplus and producer surplus with the government's price-floor policy.

f. Calculate the cost to the government if it implements its price-floor policy and buys up any surplus.

g. Briefly explain whether the government's price floor policy increases social welfare. (Hint: the easiest way is to compare the consumer surplus and producer surplus in part (b) to the consumer surplus and producer surplus in part (e) considering the cost to the government in part (f).) Assume that the government agrees to buy up any surplus that may be created by its price-floor policy only at the difference between the floor price and the equilibrium price calculated in part (a).

h. Calculate the cost to the government if it implements its price-floor policy and buys up any surplus at the difference in price described above.