The Data Shows the Demand and Supply for Wheat

The data shows the demand and supply for wheat:
quantity of bushels per year (in million)

-Refer to the information above to answer this question.What would be the cost to the government to support a price floor of $16 per bushel of wheat?

A) The cost would be $160 million to the government since it has to purchase the surplus wheat.
B) The cost would be zero to the government since the farmers are producing the wheat.
C) The cost would be zero to the government since the market will purchase the surplus wheat.
D) The cost would be $240 million to the government since the farmers receive this amount from the sales of the wheat in the market.
E) The cost would be $400 million to the government since it has to purchase all the wheat produced by the farmers.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free