2. Problems and Applications Q2 The following graph shows the market for cheese. Suppose the government decides to impose a price floor of $3 per pound in the cheese market. A price floor of $3 per pound of cheese will not _ be binding. Use the grey point (star symbol) to indicate the price of cheese and the quantity demanded after the price floor of $3 per pound is implemented. Then use the green point (triangle symbol) to indicate the price of cheese and the quantity supplied at the same price floor. 10 O Supply Demand Supply Price of Cheese (Dollars per pound) Price and Q w Demand A N Price and Qs - 0 2 3 4 5 6 7 8 9 10 Quantity of Cheese (Thousands of pounds)With a price floor of $3 per pound of cheese, there will be a shortage V of cheese. True or False: The price floor of $3 per pound of cheese reduces the total revenue of cheese producers. True 0 False Suppose the government imposes a binding price floor in the cheese market and agrees to purchase all the surplus cheese at the price floor. Compared to the basic price floor, producers of cheese V benefit from this new policy and consumers of cheese V lose. With a price floor of $3 per pound of cheese, there will be a shortage V of cheese. True or False: The price floor of $3 per pound of cheese re neither a surplus nor a shortage roducers. True 0 False Suppose the government imposes a binding price floor in the cheese market and agrees to purchase all the surplus cheese at the price floor. Compared to the basic price oor, producers of cheese V benefit from this new policy and consumers of cheese V lose. With a price floor of $3 per pound of cheese, there will be a shortage v of cheese. True or False: The price floor of $3 per pound of cheese reduces the total revenue of cheese producers. True O False producers of cheese Suppose the government imposes _ the cheese market and agrees to purchase all the surplus cheese at the price floor. taxpayers Compared to the basic price oor, producers of cheese V benefit from this new policy and consumers of cheese V lose. With a price floor of $3 per pound of cheese, there will be a shortage v of cheese. True or False: The price floor of $3 per pound of cheese reduces the total revenue of cheese producers. True O False consumers of cheese taxpayers Suppose the government imposes a binding price floor in the cheese market and agrees to pur -ese at the price floor. producers of cheese Compared to the basic price oor, producers of cheese V benefit from this new policy and consumers of cheese V lose