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Suppose that the market for wheat is characterized by the following demand and supply relationships. Demand:Q=30,000-20P Supply:Q=80P where Q is the quantity of wheat in
Suppose that the market for wheat is characterized by the following demand and supply relationships.
Demand:Q=30,000-20P
Supply:Q=80P
where Q is the quantity of wheat in bushels and P is the price of a bushel of wheat.
Suppose that the government decides that there is a shortage of bread and wants to reduce bakers' costs. As a result, Congress passes a $100 price cap on a bushel of wheat. Does this policy increase the amount of wheat that is transacted? That is, does the market quantity increase after the imposition of the price ceiling?
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