What will be the main effects of this price floor

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Refer to the table below. Suppose that the government establishes a price ceiling of $3.70 for wheat.

Thousands of Bushels Demanded

Price per Bushel

Thousands of Bushels Supplied

85

$3.40

72

80

3.70

73

75

4.00

75

70

4.30

77

65

4.60

79

60

4.90

81

What might promote the government to establish this price ceiling?  Explain carefully the main effects. Next, suppose that the government establishes a price floor of $4.60 for wheat. What will be the main effects of this price floor? Include a graphical representation in your answer.

Reference no: EM131344386

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