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

question 46

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 voluntary production reduction program to achieve their goal.How much would the government have to pay farmers?

• A) $1.5 billion
• B) $3 billion
• C) $4.5 billion
• D) $18 billion

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