9. (Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply of Wheat. A temporary price of $4 in this market would result in: A) a surplus of 4,000 bushels. B) a shortage of 2,000 bushels. C) a shortage of 4,000 bushels. D) a surplus of 2,000 bushels.

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Jarrod RobelLv2

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17. (Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply of Wheat. A price of _ will result in a A) $6; shortage B) $8; surplus $8; shortage D) $4; surplus

The wheat market is perfectly competitive, and the market supply and demand curves are given by the following equations:

QD=20,000,000-4,000,000P

QS=7,000,000+2,500,000P, where QD and QS are quantity demanded and quantity supplied measured in bushels, and P=price per bushel.

a.) Determine consumer surplus at the equilibrium price and quantity.

b.) Assume that the government has imposed a price floor at $2.25 per bushel and agrees to buy any resulting excess supply. How many bushels of wheat will the government be forced to buy? Determine consumer surplus with the price floor.