The figure below shows the demand (D)and supply (S)curves of corn syrups. Figure 35.3 In Figure 35.3, with an import quota of 30 gallons of corn syrup, what is the new equilibrium price?

Question

The figure below shows the demand (D)and supply (S)curves of corn syrups. Figure 35.3  In Figure 35.3, with an import quota of 30 gallons of corn syrup, what is the new equilibrium price?

Quizplus · Accepted Answer

When an import quota of 30 gallons of corn syrup is introduced, the supply curve shifts to the left by 30 units, which creates a new equilibrium point at the intersection of the new supply curve (S1) and the original demand curve (D). The new equilibrium price is where these curves intersect, which is at $8. Therefore, the best choice is (C).

The Figure Below Shows the Demand (D)and Supply (S)curves of Corn