• In 1981 the supply curve for wheat was approximately as follows: • Supply: Qs = 1800 + 240P where price is measured in nominal dollars per bushel and quantities in millions of bushels per year. The demand curve for wheat was • Demand: Q, = 3550 - 266P A. Determine the market-clearing price of wheat for 1981: B. Find the market-clearing quantity How much would the government have had to buy to get the price from market clearing price to $3.70? D. What is the total cost to the government of the price support program. Е. С. What is the total change in welfare?
• In 1981 the supply curve for wheat was approximately as follows: • Supply: Qs = 1800 + 240P where price is measured in nominal dollars per bushel and quantities in millions of bushels per year. The demand curve for wheat was • Demand: Q, = 3550 - 266P A. Determine the market-clearing price of wheat for 1981: B. Find the market-clearing quantity How much would the government have had to buy to get the price from market clearing price to $3.70? D. What is the total cost to the government of the price support program. Е. С. What is the total change in welfare?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Help me answer C, D, E

Transcribed Image Text:In 1981 the supply curve for wheat
was approximately as follows:
Supply: Qs = 1800 + 240P
where price is measured in nominal
dollars per bushel and quantities in
millions of bushels per year. The
demand curve for wheat was
Demand: Qp = 3550 - 266P
A. Determine the market-clearing price
of wheat for 1981:
В.
Find the market-clearing quantity
How much would the government
have had to buy to get the price from
market clearing price to $3.70?
D. What is the total cost to the
government of the price support
program.
What is the total change in welfare?
С.
Е.
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