Question
The demand for soybeans is Q= 9P, where Q is in millions of bushels and P is dollars per bushel. Ths supply of soybeans is
The demand for soybeans is Q= 9P, where Q is in millions of bushels and P is dollars per bushel.
Ths supply of soybeans is Q= 2P.
The market for soybeans is perfectly competitive. The equilibrium price for soybeans is $
nothing
. (Enter your response as aninterger.)
The equilibrium quantity for soybeans is
nothing
million bushels. (Enter your response as aninterger.)
To help soybean farmers earn largerprofits, the government institutes a price support program for soybeans. The government sets the support price(a minimumprice) at$4 per bushel and promises topurchase, at the supportprice, any soybeans that are not purchased by consumers.
On the graph to the right show the market for soybeans.
1.) Use the line drawing tool to draw the demand curve starting at Q= 0 and extending it to Q= 9. Properly label your curve.
2.) Use the line drawing tool to draw the supply curve starting atQ= 0 and extending it to Q= 10. Properly label your curve.
3.) Use the point drawing tool to indicate the equilibrium price and quantity. Label the point'E'.
4.) Use the line drawing tool to show the support price of$4; start your line a Q= 0 and extend it to Q= 9. Label you line 'Ps'
Carefully follow the instructionsabove, and only draw the required objects.
At the$4 price,
nothing
million bushels of soybeans will be demanded. (Enter your response as aninterger.)
At the$4 supportprice, farmers will produce
nothing
million bushels of soybeans. (Enter your response as aninterger.)
The government will have to purchase
nothing
million bushels of soybeans. (Enter your response as aninterger.)
The reduction in consumer surplus is $
nothing
million. (Enter your response as a real number rounded to one decimalplace.)
The increase in producer surplus as a result of the price support program is $
nothing
million. (Enter your response as a real number rounded to one decimalplace.)
The government will have to spend $
nothing
million to purchase the excess supply of soybeans. (Enter your response as a real number rounded to one decimalplace.)
The price support program will cause a deadweight loss of $
nothing
million. (Enter your response as a real number rounded to one decimalplace.)
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