suppose the total demand for wheat
Thousands of Bushels Demanded
Price per Bushel
Thousands of Bushels Supplied
85
$3.40
72
80
3.70
73
75
4.00
75
70
4.30
77
65
4.60
79
60
4.90
81
Suppose that the government establishes a price ceiling of $3.70 for wheat.
a. Why might the government establish this price ceiling?
b. suppose that the government establishes a price floor of $4.60 for wheat. What will be the main effect of this price floor?
suppose the total demand for wheat
| Thousands of Bushels Demanded | Price per Bushel | Thousands of Bushels Supplied |
| 85 | $3.40 | 72 |
| 80 | 3.70 | 73 |
| 75 | 4.00 | 75 |
| 70 | 4.30 | 77 |
| 65 | 4.60 | 79 |
| 60 | 4.90 | 81 |
Suppose that the government establishes a price ceiling of $3.70 for wheat.
a. Why might the government establish this price ceiling?
b. suppose that the government establishes a price floor of $4.60 for wheat. What will be the main effect of this price floor?
Related textbook solutions
Related questions
Consider the market for rental housing in Your town. The demand and supply schedules for rental housing are given in the table.
|
Price ($ per month) |
Quantity Demanded (thousands of units) |
Quantity Supplied (thousands of units) |
|
1100 |
40 |
80 |
|
1000 |
50 |
77 |
|
900 |
60 |
73 |
|
800 |
70 |
70 |
|
700 |
80 |
67 |
|
600 |
90 |
65 |
|
500 |
100 |
60 |
- In a Free market for rental housing, what is the equilibrium price and quantity?
- Now suppose the government in Your town decides to impose a ceiling on the monthly rental price. What is the highest level at which such a ceiling could be set in order to have any effect on the marker? Explain your answer.
- Suppose the maximum rental price is set equal to $500 per month. Describe the effect on quantity demanded, supplied, and exchanged in the rental-housing market.
- Suppose a black market develops in the presence of the rent controls in part (c). What is the black market price that would exist if all of the quantity supplied were sold on the black market?
Use the table below to answer the questions that follow:
| Quantity Demanded, Thousands | Price | Quantity Supplied, Thousands |
| 80 | $25 | 65 |
| 75 | 35 | 65 |
| 70 | 45 | 65 |
| 65 | 55 | 65 |
| 60 | 65 | 65 |
| 55 | 75 | 65 |
| 50 | 85 | 65 |
Instructions: Enter the full value.
a. If this table reflects the supply of and demand for tickets to a particular World Cup soccer game, what is the stadium capacity?
b. If the preset ticket price is $65, would we expect to see a secondary market for tickets?
(Yes/No).
Would the price of a ticket in the secondary market be higher than, the same as, or lower than the price in the primary (original) market?
i. Lower than
ii. Higher than
iii. The same as.
c. Suppose for some other World Cup game, the quantity of tickets demanded is 20,000 lower at each ticket price than what is shown in the table. If the ticket price remains $65, would the event be a sellout?
i. The event would be a sellout
ii. The event would not be a sellout.
