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

question 17

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. Which of the following best describes the market after the price floor is imposed?

• A) There will be a shortage of 5 million bushels.
• B) There will be a surplus of 5 million bushels.
• C) There will be a surplus of 7 million bushels.
• D) There will be a surplus of 12 million bushels.

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