The following graph represents the market for wheat. The equilibrium price is $20 per bushel and the equilibrium quantity is 14 million bushels.

a. Explain what will happen if the government establishes a price ceiling of $10 per bushel of wheat in this market? What if the price ceiling was set at $30?
b. Explain what will happen if the government establishes a price floor of $30 per bushel of wheat in this market. What if the price floor was set at $10?

Transcribed Image Text:

Price of wheat (bushel) Supply 30 20 10 Demand O 2 4 6 8 10 12 14 16 18 20 22 24 26 Quantity of whcat (millions of bushels)