Suppose that a new government is elected that wants to keep out the poor. It dec
ID: 1258790 • Letter: S
Question
Suppose that a new government is elected that wants to keep out the poor. It declares that the minimum price that can be charged is $4.00. If the government can enforce that price floor, will there be a surplus or a shortage? Of how many bushels? And how many bushels will actually be sold? This is part 2 of question posted. Part 1 was also posted. These are sub-parts (just fyi)
Price
Demand
Supply
5
40
170
4
60
150
3
90
90
2
100
70
1
300
Price
Demand
Supply
5
40
170
4
60
150
3
90
90
2
100
70
1
300
Explanation / Answer
As government sets the minimum price of $4 then there will be surplus because at price $4, demand is 60 while supply is 150
Hence, surplus = 90 bushels. Actual number of bushels sold = 60
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