Suppose that the demand curve for wheat is Q-140-200 and the supply curve i Q³=20p. The government imposes a price support at p-$4.00. What is the deadweight loss if the government supports the price by purchasing excess supply? (Assume the wheat will be destroyed) The deadweight loss is 5 (Round your answer to the nearest penny and enter the deadweight loss as a positive number) Suppose the government is considering supporting the price using a deficiency payment program. What would be the amount of the deficiency payment? The deficiency payment would be $ and there would be a deadweight loss of $ (Round your answer to the nearest penny and enter the deadweight loss as a positive number)

Suppose that the demand curve for wheat is Q-140-200 and the supply curve i Q³=20p. The government imposes a price support at p-$4.00. What is the deadweight loss if the government supports the price by purchasing excess supply? (Assume the wheat will be destroyed) The deadweight loss is 5 (Round your answer to the nearest penny and enter the deadweight loss as a positive number) Suppose the government is considering supporting the price using a deficiency payment program. What would be the amount of the deficiency payment? The deficiency payment would be $ and there would be a deadweight loss of $ (Round your answer to the nearest penny and enter the deadweight loss as a positive number)

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter8: Understanding Markets And Industry Changes

Section: Chapter Questions

Problem 2MC

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