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Author Question: Farmers can use their land to grow soy beans or corn. If the price of corn rises, A) the supply ... (Read 221 times)

dmcintosh

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on: Jun 29, 2018
Farmers can use their land to grow soy beans or corn. If the price of corn rises,
 
  A) the supply of soybeans decreases and the soybean supply curve shifts leftward.
  B) the supply of soybeans increases.
  C) the supply of corn increases and the corn supply curve shifts rightward.
  D) the supply of corn increases.

Question 2

Explain why a price floor set below the equilibrium price is ineffective.
 
  What will be an ideal response?


Koolkid240

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A

Answer to Question 2

Price floors are legal minimums; it is legal to charge the floor price, or higher. If the equilibrium price is legal, that is, the equilibrium price is above the price floor so that the price floor is below the equilibrium price, then the price floor has no effect on the market because the market price does not change.


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