The Market Demand and Supply Functions for Milk Are: Q_D

question 13

Essay

The market demand and supply functions for milk are: Q_D = 58 - 30.4P and Q_S = 16 + 3.2P. If a price floor of $1.75 is implemented, calculate the change in producer surplus. How many surplus units of milk are being produced? If the government purchases all the excess units at $1.75, calculate the milk expenditures by government? Does the increase in producer surplus due to the price floor exceed government spending on excess milk?

---

Definitions:

Existential Intelligence

A type of intelligence described by Howard Gardner, relating to the ability to ponder large questions about life, death, and existence.

Emotional Intelligence

The ability to recognize, understand, manage, and use emotions effectively in oneself and others.

Analytical Intelligence

The ability to analyze, evaluate, judge, compare, and contrast information as defined in the triarchic theory of intelligence.

Savant Syndrome

A rare condition where someone with significant mental disabilities demonstrates certain abilities far in excess of average.