Qd = 3,750-725P
Qs = 920+690P
where Q= millions of bushels and P= price per bushel.
a) Calculate the equilibrium price and quantity that would prevail in the free market.
b) The government has imposed a $2.50 per bushel support price. How much corn will the government be forced to purchase?
c) Calculate the loss in consumer surplus that would occur under the support program.
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