The graph shows the market for apples. The government introduces a price support

Question

The graph shows the market for apples. The government introduces a price support for apples and sets the support prices at $400 a pound. After the government introduces the price support, which what is the quantity of apples produced, the quantity of apples demanded, and the surplus? What is the amount of the subsidy received by apple framers? The quantity of apples produces is billon pounds and the quantity of apples demanded is billion pounds. The surplus is billion pounds. The subsidy received by apple farmers is billion

Explanation / Answer

Quantity of Apple Produced = 12 billion Pounds

Quantity of Aple Demanded = 8 billion Pounds

Surplus = Quantity of Apple Produced - Quantity of Aple Demanded = 12 - 8 = 4 billion pounds

Subsidy recieved by Farmers = Surplus*Support Price = 4*4 billion = $16 billions

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