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Suppose the market supply and demand curves for wheat are as follows (prices are in dollars, quantities in millions of bushels):PS = .02 QS , PD = 3 - .01 QDThe government is considering the following price support policies:
The government buys enough wheat so that a market price of $2.20 is maintained. Wheat bought by the government is stored, destroyed, or given away abroad. How much wheat does the government buy, how much is domestically consumed, and what is the cost to the government of this policy?
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