Consider the following demand and supply schedules for some agricultural commodity.
-Refer to Table 5- 2. Suppose we begin in a free- market equilibrium. If the government then imposes a production quota of 500 units, total farmers' income
A) remains unchanged.
B) decreases by $500.
C) increases by $800.
D) decreases by $700.
E) increases by $500.
Correct Answer:
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