Under the target price system, wheat farmers are willing to produce______bushels
ID: 1207721 • Letter: U
Question
Under the target price system, wheat farmers are willing to produce______bushels at a target price of $1.75 per bushel, but consumers are willing to purchase this quantity of wheat at $____per bushel. The total deficiency payment the government makes to wheat farmers is. Suppose that the government implements a price support system by setting a price floor of $1.75 per bushel in the wheat market. Under the price support system, consumers purchase________bushels of wheat and the total amount the government pays to wheat farmers is. Which of the following statements comparing a price support system and a target price system is accurate? Check all that apply. Square Farmers earn the same amount of total revenue under both systems. Square Consumers pay a lower price under a target price system. Square There is no surplus under a target price system.Explanation / Answer
At P = $ 1.75
Farmers are willing to produce Q = 70 according to supply curve
Consumers are willing to purchase Q = 70 according to Demand curve.
Total Deficiency = 70 x (1.75 - 0.75) => $ 70
Under Price support system,
Demand = 30
Government pay to farmers = ($ 70 - 30 ) x 1.75 = 70
All statements are true
Revenue = 70 in both cases
Consumer pay ont $ 0.75 under Price target sytem.
There is no surplus becasue demand is matched with supply
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.