Questions 1 and 2 are connected. 1.These questions were motivated by the articles about the U.S. government's raisin program designed to regulate the price of raisins.Assume the demand for raisins is estimated by the demand function Q D = [a + c I] / P b .The constant a = 820,000,000, the coefficient c=25, and the superscript b=1.1."I" represents average household income, which is $60,000.In any growing season, the supply of raisins, measured in thousands of tons, depends on the amount of acreage devoted to the crop, the weather, and other factors such as crop disease and insect infestations.Assume this year the annual production of raisins is forecast to be 370,000 metric tons.Production from 2018 is shown in the table below for your information.Assume the U.S. does not import or export raisins or change its inventory level.With no government interference in the market, the equilibrium price for a ton of raisins would be: a. $191 b. $1,102 c. $1,608 d. $2,220 e. $4,798 2.If the government's target price is $2400 per ton, what percentage of the production must the government confiscate? a. 8.09% b. 19.96% c. 44.78% d. 49.25% e. 57.52%

Top Raisin Producing Countries Rank Country Annual Raisin Production [in Metric Tons] Turkey 353,167 United States 332,760 Iran 122,595 Greece 72,861 Chile 51,128 South Africa 37,049 Uzbekistan 32,893 Afghanistan 30,281 Australia 26,041 10 Argentina 19,543