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

question 29

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 $P = 0.25 Q ^ {5 }$ . 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 new equilibrium quantity traded in this market?

• A) Q = 8;
• B) Q = 2;
• C) Q = 7
• D) Q = 3

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Definitions:

Marginal Product

The increase in output that arises from an additional unit of input.

Marginal Revenue

The additional income generated from the sale of one more unit of a product or service.

Marginal Product

Marginal product is the additional output that is produced by adding one more unit of a specific input, holding all other inputs constant.

Optimal Labor Employment

The most efficient allocation of labor resources in a business to maximize productivity and minimize costs.