Exhibit 39-4
-Refer to Exhibit 39-4.The government feels that the present level of farmers' total revenues is insufficient to support a reasonable standard of living and wants to raise it to exactly $3,000.This can be achieved by

Question

Exhibit 39-4 
-Refer to Exhibit 39-4.The government feels that the present level of farmers' total revenues is insufficient to support a reasonable standard of living and wants to raise it to exactly $3,000.This can be achieved by

Quizplus · Accepted Answer

Based on the graph, restricting supply so that price increases to $5 would increase total revenue for farmers to exactly $3,000. At this price, the quantity supplied would decrease to 600 bags and the total revenue for farmers would be $3,000 (600 x $5). A price support of $5 would also achieve the desired total revenue, but it would result in an excess supply of 400 bags, which could lead to inefficiencies and potential wastage. Restricting supply to raise the price to $4 would not be sufficient to reach the target revenue of $3,000.

Exhibit 39-4 -Refer to Exhibit 39-4.The Government Feels That the Present Level