Suppose That the Market for Corn Is Initially in Equilibrium $P = 10 - Q ^ { d }$

question 11

Multiple Choice

Suppose that the market for corn is initially in equilibrium and is perfectly competitive. The demand curve can be expressed as $P = 10 - Q ^ { d }$ ; the supply curve can be expressed as $P =$ $0.25 Q ^ { s }$ . Quantity is expressed in millions of bushels. Now suppose that the federal government imposes a price floor of $\$ 3$ per bushel of corn. What is the dead-weight loss (per million bushels) associated with the price floor when the least efficient producers are active?

• A)$9.375
• B)$2.25
• C)$1
• D)$0.63

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