Assume that the government creates price supports for tomatoes in order to help the farmers. If these price supports take the form of a price floor in which the government prohibits the price of tomatoes from rising below $1.15 per kg, will there be a surplus or shortage of tomatoes? Calculate the quantity of the surplus or shortage.

Answer rating: 100% (QA)

Solution If the government sets a price floor for tomatoes at 115 per kg and the market eq... View the full answer