Suppose that the market for corn is initially in equilibrium and is perfectly competitive.The demand curve can be expressed as ; the supply curve can be expressed as Quantity is expressed in millions of bushels.Now suppose that the federal government imposes a price floor of $3 per bushel of corn.Which of the following best describes the market after the price floor is imposed?
A) There will be a shortage of 5 million bushels.
B) There will be a surplus of 5 million bushels.
C) There will be a surplus of 7 million bushels.
D) There will be a surplus of 12 million bushels.

Question

Suppose that the market for corn is initially in equilibrium and is perfectly competitive.The demand curve can be expressed as  ; the supply curve can be expressed as  Quantity is expressed in millions of bushels.Now suppose that the federal government imposes a price floor of $3 per bushel of corn.Which of the following best describes the market after the price floor is imposed?
A) There will be a shortage of 5 million bushels. 
B) There will be a surplus of 5 million bushels. 
C) There will be a surplus of 7 million bushels. 
D) There will be a surplus of 12 million bushels.

Quizplus · Accepted Answer

The Answer of Suppose that the market for corn is initially in equilibrium and is perfectly competitive.The demand curve can be expressed as  ; the supply curve can be expressed as  Quantity is expressed in millions of bushels.Now suppose that the federal government imposes a price floor of $3 per bushel of corn.Which of the following best describes the market after the price floor is imposed?
A) There will be a shortage of 5 million bushels. 
B) There will be a surplus of 5 million bushels. 
C) There will be a surplus of 7 million bushels. 
D) There will be a surplus of 12 million bushels.

Suppose That the Market for Corn Is Initially in Equilibrium