What are the equilibrium price and quantity

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Reference no: EM131642830

Question: Use the information on the kumquat market in the table to answer the following questions:

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a. What are the equilibrium price and quantity? How much revenue do kumquat producers receive when the market is in equilibrium? Draw a graph showing the market equilibrium and the area representing the revenue kumquat producers receive.

b. Suppose the federal government decides to impose a price floor of $30 per crate. Now how many crates of kumquats will consumers purchase? How much revenue will kumquat producers receive? Assume that the government does not purchase any surplus kumquats. On your graph from question (a), show the price floor, the change in the quantity of kumquats purchased, and the revenue kumquat producers receive after the price floor is imposed.

c. Suppose the government imposes a price floor of $30 per crate and purchases any surplus kumquats from producers. Now how much revenue will kumquat producers receive? How much will the government spend on purchasing surplus kumquats? On your graph from question (a), show the area representing the amount the government spends to purchase the surplus kumquats.

Reference no: EM131642830

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