In response to problems in the global supply chain of grains, the government mandates a minimum legal price for many agricultural crops to incentivize farmers to grow more food domestically and rely less on foreign suppliers. The market price of a bushel of wheat prior to the price floor was $800. The minimum legal price is now $1,000. In the next growing season, farmers are able to sell 1 billion bushels but end up with 500 million bushels that they can't sell. Adjust the graph to illustrate this outcome. Determine the value of each variable from the graph. P e = P f = Q 1 = Q 2 = ?

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Supply and Demand with Price Floor A Graphical Analysis Price Floor and Surplus The governments intervention with a price floor of 1000 per bushel cre... View the full answer