Farmers in Corntopia successfully lobby their government to enact a price floor
ID: 1229887 • Letter: F
Question
Farmers in Corntopia successfully lobby their government to enact a price floor for their agricultural commodity. The price floor is set at $ 10 above the equilibrium price. The initial demand and supply curves for agricultural production in Corntopia are as follows: P=100-Q, P=Q, where price is per bushel and quantity is measured in bushels.a) What is the level of the price floor in this market?
b) How many units of the agricultural product will be demanded and supplied at the price floor level?
I think part a) is $60 but if i am wrong please correct me. I need help with part b)
Explanation / Answer
a)pf = 60 dollars b)demanded = 40 supplied = 60 http://faculty.ses.wsu.edu/Munoz/Teaching/EconS101_Fall2009/Exams_EconS101_Spring2009/Midterm1_EconS101_Spring2009_AnswerKey.pdf for reference
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