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The market demand function for corn is Qd = 18 - 2P The market supply function is QS = 5P -1.5 both measured in billions
The market demand function for corn is Qd = 18 - 2P The market supply function is QS = 5P -1.5 both measured in billions of bushels per year. What would be the welfare effects of a policy that put a cap of $2.25 per bushel on the price farmers can charge for corn? (Assume that corn is purchased by the consumers who place the highest value on it.) Instructions: Round quantities to one decimal place. Round prices and surpluses to two decimal places. Amount ($) New level of consumer billion surplus New level of producer surplus billion New level of aggregate billion surplus Deadweight loss billion
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