Question: Price Intervention (2 marks) A price support program for farmers producing wheat is put into effect by the government. In order to increase farms' income,

 Price Intervention (2 marks) A price support program for farmers producing

Price Intervention (2 marks) A price support program for farmers producing wheat is put into effect by the government. In order to increase farms' income, the government creates a price floor in the market for wheat and buy any surplus wheat and store it in Alberta at $2/lb. The government sets the price floor at Pfloor = $10/1b. of wheat. The supply and demand schedules for wheat are as follows: QSupply ( V ) (P-4)/2 ( X ) QDemand = (16-P)/4

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