Despite this effort, they not satisfied with market price

Reference no: EM131004100

Rice farmers find that they face the market conditions il- lustrated in the table on the next page. Plot the demand and supply curves given these data. Identify the market equilibrium price and quantity. Rice farmers are well or- ganized, and have promoted rice consumption with their ad campaign "Rice is nice." Despite this effort, they are not satisfied with the market price and they successfully lobby the government for a price support of $0.80 per bushel. Show the quantity that would be supplied and the quantity that would be demanded at this government- mandated price.

Quantity

(millions of Price per Marginal Cost bushels) Bushel per Bushel

0 - $0.00

1 $1.00 0.20

2 0.90 0.40

3 0.80 0.60

4 0.70 0.80

5 0.60 1.00

6 0.50 1.20

Reference no: EM131004100

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