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If there is a free market for renting quota, what is the maximum the quota should rent for per cwt? If a farmer with marginal production cost of $6 per cwt. owned quota, would it be more profitable for her/him to produce the sugar or to rent the quota to someone else? Please explain  Pictured is of previous questions if needed but needing help with question 4 that is pictured. Not sure if this is necessary for the question but given is  demand for sugar: Q= 20 - P  Supply for sugar: Q = 2 + P  quantities are in million hundredweight (cwt) and price is dollars per cwt.

If there is a free market for renting quota, what is the maximum the quota should rent for per cwt? If a farmer with marginal production cost of $6 per cwt. owned quota, would it be more profitable for her/him to produce the sugar or to rent the quota to someone else? Please explain  Pictured is of previous questions if needed but needing help with question 4 that is pictured. Not sure if this is necessary for the question but given is  demand for sugar: Q= 20 - P  Supply for sugar: Q = 2 + P  quantities are in million hundredweight (cwt) and price is dollars per cwt.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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If there is a free market for renting quota, what is the maximum the quota should rent for per cwt? If a farmer with marginal production cost of $6 per cwt. owned quota, would it be more profitable for her/him to produce the sugar or to rent the quota to someone else? Please explain 

Pictured is of previous questions if needed but needing help with question 4 that is pictured.

Not sure if this is necessary for the question but given is 

demand for sugar: Q= 20 - P 
Supply for sugar: Q = 2 + P 

quantities are in million hundredweight (cwt) and price is dollars per cwt.

Editing Vo m with this file and can't save any new changes. Please save a copy to avoid losing your work. Save a Copy agricunurar policy? P = 9 Q= 11 2. If the government establishes a support price for sugar of $12 per cwt. (hundred pounds) and is willing to buy up any surplus sugar at that price, indicate on your graph the quantity supplied, quantity demanded, and quantity purchased by the| government. If the units are million cwt., how much money is required for the government purchases? Show this amount on your graph. The equilibrium price is $9 per cwt. If the government fixes the price at $12 then there will be an excess of supply of sugar over demand. This means that P = $12, the demand for sugar is 8 million cwt where the quantity supplied is 14 million cwt. There is then an excess supply of 6 million cwt of sugar (14-8 6). If the government purchases that excess supply at a price of $12 per cwt, it would requite $72 million for government purchases (12 x 6 = 72). The shaded part of the rectangle in the graph are government purchases. 3. The government decides that the sugar price support program is getting too expensive. It abandons the support-price program and instead assigns a marketing quota to each sugar producer. This quota gives the holder the right to sell sugar on the market and can be transferred to other producers. Altogether the quotas allocated to sugar growers add up to 9 million cwt. Please graph this problem, indicating clearly the market price and quantity 4 If there is a free market for renting quota, what is the maximum the quota should rent for per cwt? If a farmer with marginal production costs of $6 per cwt. owned quota, would it be more profitable for her/him to produce the sugar or to rent the quota to someone else? Please explain. O 罗 ETIT!
Transcribed Image Text:Editing Vo m with this file and can't save any new changes. Please save a copy to avoid losing your work. Save a Copy agricunurar policy? P = 9 Q= 11 2. If the government establishes a support price for sugar of $12 per cwt. (hundred pounds) and is willing to buy up any surplus sugar at that price, indicate on your graph the quantity supplied, quantity demanded, and quantity purchased by the| government. If the units are million cwt., how much money is required for the government purchases? Show this amount on your graph. The equilibrium price is $9 per cwt. If the government fixes the price at $12 then there will be an excess of supply of sugar over demand. This means that P = $12, the demand for sugar is 8 million cwt where the quantity supplied is 14 million cwt. There is then an excess supply of 6 million cwt of sugar (14-8 6). If the government purchases that excess supply at a price of $12 per cwt, it would requite $72 million for government purchases (12 x 6 = 72). The shaded part of the rectangle in the graph are government purchases. 3. The government decides that the sugar price support program is getting too expensive. It abandons the support-price program and instead assigns a marketing quota to each sugar producer. This quota gives the holder the right to sell sugar on the market and can be transferred to other producers. Altogether the quotas allocated to sugar growers add up to 9 million cwt. Please graph this problem, indicating clearly the market price and quantity 4 If there is a free market for renting quota, what is the maximum the quota should rent for per cwt? If a farmer with marginal production costs of $6 per cwt. owned quota, would it be more profitable for her/him to produce the sugar or to rent the quota to someone else? Please explain. O 罗 ETIT!
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