Suppose the consumer demand curve for flour is P=$0.50 - 0.002Q. Suppose the cost of turning wheat into flour is $0.20 per pound of retail-equivalent wheat. That is, the marketing bill for wheat made into flour is $0.20 per pound of retail-equivalent wheat. Next, suppose that the wheat supply curve is given by the formula P = $0.05 + 0.0005(Q), where Q is the lbs. retail-equivalent wheat (lbs. of flour produced by however much wheat is produced).

What is the equilibrium farm price?

$0.30/lb.

$0.15/lb.

$0.10/lb.

$0.20/lb.

What is the equilibrium farm quantity?

100 billion pounds

175 billion pounds

140 billion pounds

75 billion pounds