If the Equilibrium Price of Corn Is $3 a Bushel

question 19

Multiple Choice

If the equilibrium price of corn is $3 a bushel and the government imposes a floor of $4 a bushel,the price of corn will _______________________.

• A)increase to $4
• B)remain at $3
• C)rise to about $3.50
• D)be impossible to determine

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Definitions:

Quantity Supplied

Quantity Supplied refers to the amount of a good or service that producers are willing and able to sell at a given price.

Market Equilibrium

Occurs when the quantity of goods demanded by consumers equals the quantity of goods supplied by producers, resulting in a stable market price.

Price

The amount of money required to purchase a good or service, typically determined by supply and demand.

Quantity

The amount or number of a product or service that is available for use or sale.