Basmati Rice(S/bushel)S4D3090(millions of bushels)In the market for rice, the government supports the price of rice at $4 perbushel. This price floor causes a surplus because, at this price, the quantityfarmers produce is greater than the quantity that consumers buy. How largeis the surplus, and how much does the price support cost the government if itbuys up the surplus?Select one:O a. 60 million bushels; $240 million.O b. 30 million bushels; $90 million.O c. 90 million bushels; $270 million.O d. 60 million bushels; $180 million.Clear my choice603.

Surplus amount would be 90-30=60

Basmati Rice (S/bushel) 4 D 30 60 90 (millions of bushels) n the market for rice, the government supports the price of rice at $4 per ushel This price floor causes a surplus because at this price the quantity 3.

Basmati Rice (S/bushel) 4 D 30 60 90 (millions of bushels) n the market for rice, the government supports the price of rice at $4 per ushel This price floor causes a surplus because at this price the quantity 3.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Basmati Rice
(S/bushel)
S
4
D
30
90
(millions of bushels)
In the market for rice, the government supports the price of rice at $4 per
bushel. This price floor causes a surplus because, at this price, the quantity
farmers produce is greater than the quantity that consumers buy. How large
is the surplus, and how much does the price support cost the government if it
buys up the surplus?
Select one:
O a. 60 million bushels; $240 million.
O b. 30 million bushels; $90 million.
O c. 90 million bushels; $270 million.
O d. 60 million bushels; $180 million.
Clear my choice
60
3.

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