1. Pressed by lobbyists for the corn industry, Congress is considering adding a price floor in the market for corn. The market is currently at equilibrium. The proposed price floor would be at $6 per bushel. Below is the table for the corn market. P per bushel $2 $3 $4 $5 $6 $7 $8 Qs (mill) Qd (mill) 0 60 10 50 20 40 30 30 40 20 50 10 60 0 a. Draw a graph that illustrates the effect of the price floor on the corn market. Label the quantity supplied (Qs) and quantity demanded (Qd) when the floor is in place. b. Explain how your graph illustrates the: i. Benefit to corn producers ii. 111. Harm to corn consumers Inefficiency that results from this policy

1. Pressed by lobbyists for the corn industry, Congress is considering adding a price floor in the market for corn. The market is currently at equilibrium. The proposed price floor would be at $6 per bushel. Below is the table for the corn market. P per bushel $2 $3 $4 $5 $6 $7 $8 Qs (mill) Qd (mill) 0 60 10 50 20 40 30 30 40 20 50 10 60 0 a. Draw a graph that illustrates the effect of the price floor on the corn market. Label the quantity supplied (Qs) and quantity demanded (Qd) when the floor is in place. b. Explain how your graph illustrates the: i. Benefit to corn producers ii. 111. Harm to corn consumers Inefficiency that results from this policy

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 5SCQ: The federal 3mm decides to require that automobile manufacturers install new anti-pollution...

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