he market demand function for corn is
Qd = 25 - 2P Themarket supply function is
Qs = 5P -3
both measured in billions of bushels per year. What would be thewelfare effects of a policy that put a cap of $3.50 per bushel onthe price farmers can charge for corn? (Assume that corn ispurchased by the consumers who place the highest value onit.)
Instructions: Round quantities to one decimalplace. Round prices and surpluses to two decimal places.
| Amount($) |
| Newlevel of consumer surplus | billion |
| Newlevel of producer surplus | billion |
