This preview shows page 1. Sign up to view the full content.
Unformatted text preview: er s urplus New lev el of aggregate s urplus Deadweight los s Am ount ($)
2.86 billion Worksheet Section: Policies Designed to
Raise Prices The market demand function for corn is Qd = 28 2P The market supply function is Qs = 5P 4 both measured in billions of bushels per year. What would be the welfare effects of a policy that put a cap of
$4.00 per bushel on the price farmers can charge for corn? (Assume that corn is purchased by the consumers
who place the highest value on it.)
Instructions: Round quantities to...
View Full Document
- Fall '13