A5 Suppose, to benefit soy farmers harmed by a drop in demand for soybeans the government was to institute a price floor setting the minimum price of soy beans at $12 per bushel. Use thegraph below to answer the following questions regarding the price floor.Soybean Market$20Supply$16Price(Per Bushel)$12$4Demand01030405020Quantity(Thousands of Bushels)(a) Prior to the institution of price floor, what was the equilibrium price of a bushel of soybeans? [Select](b) Does the institution of a price floor increase or decrease the quantity of soybeans demanded?[Select](c) Does the institution of a price floor create a shortage or a surplus in the market for soybeans? [Select](d) How many fewer soybeans are sold after the price floor was put in place than were sold without the price floor? [Select]

Floor price is the minimum support price or price can not fall below the floor price.

Suppose, to benefit soy farmers harmed by a drop in demand for soybeans the government was to institute a price floor setting the minimum price of soy beans at $12 per bu graph below to answer the following questions regarding the price floor. Soybean Market $201 Supply $16

Suppose, to benefit soy farmers harmed by a drop in demand for soybeans the government was to institute a price floor setting the minimum price of soy beans at $12 per bu graph below to answer the following questions regarding the price floor. Soybean Market $201 Supply $16

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

Suppose, to benefit soy farmers harmed by a drop in demand for soybeans the government was to institute a price floor setting the minimum price of soy beans at $12 per bushel. Use the
graph below to answer the following questions regarding the price floor.
Soybean Market
$20
Supply
$16
Price
(Per Bushel)
$12
$4
Demand
0
10
30
40
50
20
Quantity
(Thousands of Bushels)
(a) Prior to the institution of price floor, what was the equilibrium price of a bushel of soybeans? [Select]
(b) Does the institution of a price floor increase or decrease the quantity of soybeans demanded?
[Select]
(c) Does the institution of a price floor create a shortage or a surplus in the market for soybeans? [Select]
(d) How many fewer soybeans are sold after the price floor was put in place than were sold without the price floor? [Select]

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