Cheese at the price floor, Microeconomics

Assume that the U.S. Department of Agriculture (USDA) administers the price floor for cheese, set at $0.17 per pound of cheese. (The price floor is formally set at $16.10 per hundredweight of cheese. One hundred weights are 100 pounds.) At that price, according to data from the USDA, the quantity of cheese formed in 2009 by U.S. producers was 212.5 billion pounds, and the quantity demanded was 211 billion pounds. To maintain the price of cheese at the price floor, the USDA had to buy up 1.5 billion pounds of cheese. The accompanying diagram demonstrate supply and demand curves illustrating the market for cheese.



a.  In the absence of a price floor, how much consumer surplus is created? How much producer surplus? What is the total surplus


b.  With the price floor at $0.17 per pound of cheese, consumers buy 211 billion pounds of cheese. How much consumer surplus is formed now

Posted Date: 3/23/2013 6:14:50 AM | Location : United States







Related Discussions:- Cheese at the price floor, Assignment Help, Ask Question on Cheese at the price floor, Get Answer, Expert's Help, Cheese at the price floor Discussions

Write discussion on Cheese at the price floor
Your posts are moderated
Related Questions

Why do demand curves generally slope downward?  The demand curve slopes downward because in general, the higher the price of the good, the fewer people will need to buy it.

(a) What  are the problems associated with R 2 and how can adjusted R 2 solve them? (b) If the regressors  in an equation are highly correlated, which measures can be used to

Given that TC=1000+10Q-0.9Q^2+0.04Q^3,,Find the rate of output Q that result in minimum Average variable cost

given the cost function as C=0.3Q3-2Q2+13Q+25,find the supply function

Q. What do you meant by Progressive Tax? Progressive Tax:Tax is considered progressive if a larger proportionate share of its total burden falls on individual'swith higher avera

KEYNES' THEORY AND EXPECTATIONS : Expectations played a major role in Keynes' theory of the determination of aggregate output and employment in market economies in the short run

The economic model forecasting involves estimating several simultaneous equations which are generally behavioural equation mathematical identities and market clearing equations. T

hoe does the knowledge of price elasticity of demand important to the government

Technical Economies: They are economies that accrue from the use of large machines with emphasis on full utilization and efficiency in production. First, there are some equip