Q8) The market demand for solghum is given by Qd = 500 101'\

Q8) The market demand for sorghum is given by Qd 500 IOPd, while the market supply curve is given by QS 40P. The demand and supply curve are shown below. The government would like to increase the income of fanners and is considering two alternative government interventions: an acreage limitation program and a government purchase program. so a) What is the equilibrium market price in the absence of government intervention? b) The government's goal is to increase the price of sorghum to S15 per unit. This is the support price. How much would be demanded at a price of S15 unit? How much would farmers want to supply at a price of S15 per unit? How much would the government need to pay farmers in order for them to voluntarily restrict their output of sorghum to the level demanded at S15 per unit? c) Fill in the following table for the acreage limitation program: