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The demand and supply schedules for rice are given in the table.
What are the price, the marginal cost of producing rice, and the quantity produced if the government
a. Sets a production quota for rice of 2,000 boxes a week?
b. Introduces a subsidy to rice growers of $0.30 a box?
Price (dollars per box)
Quantity demanded
Quantity supplied
(boxes per week)
1.00
3,500
500
1.10
3,250
1,000
1.20
3,000
1,500
1.30
2,750
2,000
1.40
2,500
1.50
2,250
1.60
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