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crimeas [40]
3 years ago
13

Suppose the government decides to create a price support (floor) on the price of corn, which of the following is a true statemen

t?
a) A binding price support/floor will tend to lower the price of corn for poorer people.
b) If the government does not buy any wheat, there will tend to be an excess supply of wheat in the marketplace, if the price floor is binding.
c) A non-binding price support/floor below the equilibrium price in the market will also lead to a rise in the price of corn.
d) It is likely that the total surplus (consumer surplus plus producer surplus) will rise with a price support program.
Business
1 answer:
SashulF [63]3 years ago
5 0

Answer:

<u><em>b) If the government does not buy any wheat, there will tend to be an excess supply of wheat in the marketplace, if the price floor is binding.</em></u>

Explanation:

Price support scheme is a government's policy to ensure that that the farmers earn profit on their commodities and keep producing. It main purpose is the encourage investment and production. To achieve this governments establish minimum price and purchases crops at that price.

It is an important component of government to promote agriculture. It is also beneficial for the consumers as it doesn't allows the price to rise above a certain level  and leads to lower prices for the consumers. If the government stops buying the wheat then there will be excess supply because no one will be able to buy the wheat at lesser price.

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Answer:

$50.47

Explanation:

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Cash flow in year 1 - 4 = $173

Cash flow in year 5 = $173 + $144

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NPV = 50.47

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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Assume there are currently five firms producing and selling computer chips in the European market. Also assume that the product
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Where few firms dominate the equilibrium price will increase because the demand will be high, and this will make the equilibrium price increase.

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