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aksik [14]
2 years ago
12

What will be the reason for the answer?

Mathematics
1 answer:
puteri [66]2 years ago
6 0

Answer: Choice B

Shortage of corn

No effect on the P and Q of wheat

======================================================

Explanation:

Let's focus on each product separately, starting with the corn.

If the government sets a ceiling on the price below equilibrium, then this means the price is too low compared to what buyers and sellers would naturally agree on (through the market forces of supply and demand). The price cannot rise (legally that is) above the ceiling no matter how much it wants to.

Since the price is too low, producers aren't going to have much incentive to make as much corn. At the same time, buyers are going to demand more corn. This results in a shortage. This always happens when there are more buyers than sellers.

----------

Now onto the wheat.

The floor price being below the equilibrium price is a bit silly and not needed. There is no need for a floor in this location because the price will naturally gravitate toward equilibrium. If the floor was set above the equilibrium, then we'd have an oversupply of wheat. That isn't the case here.

So there's no change on the values of P and Q (price and quantity)

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