The table shows the demand and supply schedules

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Reference no: EM13837314

Price (dollar per tonne)	Quantity demanded (kilo tonnes)	Quantity supplied (kilo tonnes)
100	2,000	0
150	1,400	600
200	1,200	800
250	1,000	1,000
300	800	1,200
350	600	1,400
400	0	2,000

The table shows the demand and supply schedules for US wheat market. The US Farm Bill 2012 indicates that the domestic price of wheat will be set at $300 per tonne, which is above the market equilibrium level of $250 per tonne, in order to support for domestic wheat growers. At the market equilibrium, 1,000 kilo tonnes (Kt) are supplied.

n a graph, explain how the price control in the US would change the consumer surplus, producer surplus, and deadweight loss in the domestic wheat market. Assume that the US does not trade wheat internationally. Also, calculate the changes in consumer surplus, producer surplus and deadweight loss. (Remember 1 kilo tonne = 1,000 tonnes)

Reference no: EM13837314

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