Explore BrainMass

Explore BrainMass

    Wheat Market Consumer Surplus Calculation

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The wheat market is competitive with the market supply and demand curves:
    QD=20,000,000-4,000,000P
    QS=7,000,000+2,500,000P
    Where QD and QS are quantity demanded and quantity supplied measured in bushels, and P=price per bushel.

    A) Determine consumer surplus at the equilibrium price and quantity.

    B) Assume the government has imposed a price floor at $2.25 per bushel and agrees to buy any resulting excess supply. How many bushels of wheat will the government be forced to by? Determine consumer surplus with the price floor.

    © BrainMass Inc. brainmass.com March 4, 2021, 6:24 pm ad1c9bdddf
    https://brainmass.com/economics/demand-supply/wheat-market-consumer-surplus-calculation-43521

    Solution Summary

    This solution provides steps necessary to calculate wheat market consumer surplus.

    $2.49

    ADVERTISEMENT