Demand diagram to show effect of policy on price of cheese

Assignment Help Microeconomics

Reference no: EM131256515

Assignment

The government has decided that the free-market price of cheese is too low. Suppose the government imposes a binding price floor in the cheese market.

a) Use a supply-and demand diagram to show the effect of this policy on the price of cheese and the quantity of cheese sold.

b) Is there a shortage or surplus of cheese?

c) Farmers complain that the price floor has reduced their total revenue. Is this possible? Explain.

d) In response to farmers' complaints, the government agrees to purchase all of the surplus cheese at the price floor. Who benefits from this new policy? Who loses? Explain.

Reference no: EM131256515

Questions Cloud

Calculate the consumer and producer surplus before the tax : Calculate the consumer and producer surplus before the tax. How is this proposed tax going to affect the market for Smartphone cases - that is, how will it affect the price of the cases and the amount of cases that are sold?

What steps can you take to reduce your ecological footprint : Summarize your quiz results. Which areas did you have the least and which the biggest impact on the earth (food, shelter, mobility, resources, or goods)? If everyone lived like you. how many planets would we need? How many global acres does it tak..

European community directive on data protection strictly : The European Community's Directive on Data Protection strictly limits how database information is used and who has access to it. Some of the restrictions include registering all databases containing personal information with the countries in which..

How does the strategy for rei compare to the strategy : How does the strategy for REI compare to the strategy of one of the competitors you selected in the Market Position discussion in Unit 1? What are some changes you would recommend to REI to maximize their strategy in your chosen product category

Demand diagram to show effect of policy on price of cheese : Use a supply-and demand diagram to show the effect of this policy on the price of cheese and the quantity of cheese sold. Farmers complain that the price floor has reduced their total revenue. Is this possible? Explain.

Company annual report on the internet : Select one of the two companies you identified above. Locate the company's annual report on the Internet. What is the company''s mission statement or overriding objective? In which nations does it produce and market its products?

How can you use the understanding yourself : What kinds of information from your readings and independent research support your perspective? What are some examples and anecdotes to illustrate this? Feel free to draw from your own professional experiences. How can you use the Understanding Yours..

Explain the advantages of business ethics : 1. Explain the advantages of business ethics. 2. What do you think management's role should be in setting ethical standards? 3. What is social responsibility?

Discuss the benefits of using the expenditure approach : We know what GDP measures. List and discuss the benefits of using the expenditure approach to measuring GDP. What does it measure well, and what things are not measured by GDP but are still important in our lives?

User Account

All Pages