The Market Demand Function for Wheat Is Q^d = 10

question 18

Multiple Choice

The market demand function for wheat is Q^d = 10 - 2P and the market supply function is Q^s = 4P - 2,both measured in billions of bushels per year.Suppose the government wants to increase the price of wheat to $3/bushel and they impose a price floor to achieve their goal.How much wheat goes to waste under the program?

• A) 10 billion bushels per year
• B) 4 billion bushels per year
• C) 6 billion bushels per year
• D) No wheat goes to waste.

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Definitions:

Input Costs

Expenses that are incurred in order to produce goods or services.

Beverages

Liquid drinks, which can be alcoholic or non-alcoholic, consumed for refreshment or pleasure.

Appetizers

Small dishes served before the main meal to stimulate the appetite.

Entrees

The main dishes of a meal.