The wheat market is perfectly competitive, and the market supply and demand curves are given by the following equations: QD = 20,000,000 - 4,000,000P QS = 7,000,000 + 2,500,000P where QD and QS are quantity demanded and quantity supplied measured in bushels, and P = price per bushel. a. Determine consumer surplus at the equilibrium price and quantity. Provide a fully labelled diagram to support your answer. Show all intercepts, equilibrium points, label axis and curves fully. b. Assume that the government has imposed a price floor at $2.25 per bushel and agrees
The wheat market is
QD = 20,000,000 - 4,000,000P QS = 7,000,000 + 2,500,000P
where QD and QS are quantity demanded and quantity supplied measured in bushels, and P = price per bushel.
a. Determine
b. Assume that the government has imposed a
PLEASE DRAW THE DIAGRAM !
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