The above figure shows the domestic market for wheat. Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton
The quantity bought by domestic users once the price support is in place is A) 300 million tons.
B) 400 million tons.
C) 250 million tons.
D) 200 million tons.
E) 100 million tons.
E
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From the Keynesian perspective, an increase in cyclical unemployment during a recession represents
A) an equivalent increase in the natural rate of unemployment. B) a roughly equal mix of voluntary and involuntary unemployment. C) involuntary unemployment. D) a decrease in the number of discouraged workers in an economy.
Suppose the cost of raw materials used by the cotton industry rises to a larger extent compared to the increase in demand in the market. Which of the following situations will arise?
a. The incidence of the higher cost will fall completely on the consumers. b. The incidence of the higher cost will fall completely on the high cost firms. c. The incidence of the higher cost will fall completely on the low cost firms. d. The incidence of the higher cost will fall partially on the consumers and partially on the sellers.