Worksheet 8: Analyzing the Effects of a Price Floor L The table below contains information about the corn market Use the table to answer the questions. Price per Quantity Demanded Quantity Supplied bushel (bushels) (bushels) .- somo 10.000 20.000 . 30.000 n_ 40.000 -__ 50.000 55.000 60.000 '4 | C a. Identify free market equilibrium price and quantity? b. Using the data above, draw a demand and supply graph of the corn market and clearly identify the equi- librium outcome. Draw a large graph and identify data points on your graph. c. An agricultural support price is a price that the government guarantees farmers will receive for a particu- lar crop. Suppose the federal government sets a support price for corn at $1] per bushel. in the diagram you drew above draw a horizontal line to depict the price support (1. What happens in the corn market as a result of the price support? Is there a shortage or a surplus and what is the amount? Economic Efciency. Government Price Setting. and Taxes 55