Essay
Demand for rice is given by P = 100 - Q and the supply of rice is given by P = Q - 20. The government imposes a guaranteed price of $60 for rice.
i)What will be the impact of this program? Specifically, what price will consumers pay, what price will sellers receive, and how much money will the government pay?
ii)What is the reduction in total surplus associated with this program relative to the efficient outcome?
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i)With a guaranteed price of 60, sellers...View Answer
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