Exhibit 4-11 Data on supply and demand

Bushels demanded
per month

Price per
bushel

Bushels supplied
per month

45

$5

77

50

4

73

56

3

68

61

2

61

67

1

57

Which of the following would occur if the government imposed a price floor (support price) of $4 per bushel in the wheat market shown in Exhibit 4-11? A) Buyers would want to purchase more wheat than is supplied. B) Buyers would not purchase all of the wheat grown. C) Shortage of wheat would increase the price of wheat. D) Farmers would grow less wheat.

Question

Exhibit 4-11 Data on supply and demand

Bushels demanded per month	Price per bushel	Bushels supplied per month
45	$5	77
50	4	73
56	3	68
61	2	61
67	1	57

Which of the following would occur if the government imposed a price floor (support price) of $4 per bushel in the wheat market shown in Exhibit 4-11? A) Buyers would want to purchase more wheat than is supplied. B) Buyers would not purchase all of the wheat grown. C) Shortage of wheat would increase the price of wheat. D) Farmers would grow less wheat.

Quizplus · Accepted Answer

A price floor set above the equilibrium price (which appears to be below $4 based on the data) would lead to a surplus, where the quantity of wheat supplied exceeds the quantity demanded. This means buyers would not purchase all of the wheat grown, leading to excess supply.

Exhibit 4-11 Data on Supply and Demand