need help. be sure to also include suitable diagram as well for the rice market. (a)Rice is a staple food in many Asian economies and many farmers depend on growingand selling rice for a living.(i)Discuss the welfare effects when the government implement a price ceiling inthe rice market to help the rice consumers. Explain your answers with a suitablerice market diagram. You will need to state the shapes of the price elasticitiesof the market demand and the market supply curves when you draw the ricemarket diagram.(ii)Discuss the welfare effects when the government implement a price floor in therice market to help the rice producers.

Truly speaking rice is also one of the most important and fastest-growing staple foods. Again we…

Answered: Rice is a staple food in many Asian…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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need help. be sure to also include suitable diagram as well for the rice market.

(a)
Rice is a staple food in many Asian economies and many farmers depend on growing
and selling rice for a living.
(i)
Discuss the welfare effects when the government implement a price ceiling in
the rice market to help the rice consumers. Explain your answers with a suitable
rice market diagram. You will need to state the shapes of the price elasticities
of the market demand and the market supply curves when you draw the rice
market diagram.
(ii)
Discuss the welfare effects when the government implement a price floor in the
rice market to help the rice producers.

Expert Solution

Step 1

Truly speaking rice is also one of the most important and fastest-growing staple foods.
Again we can say that rice is the fastest-growing staple food similar strong consumption growth has also been evident among the specific countries with rice consumption almost doubling in the last two decades.
Along with strong population growth, the rapid rise in per capita consumption has also contributed to this rapid growth in rice demand.
We can say that even in developed countries and regions such as the United States and the European Union, per capita consumption of rice continues to grow, partly due to immigration from Asian countries. We can say that In most of the developing world, rice availability is equated with food security and closely connected to political stability.
If we do something variation which changes in rice availability, and hence price, have caused social unrest in several countries.
We can say that exactly where the price ceiling is a limit on the price of a good or service imposed by the government to protect consumers by ensuring that prices do not become prohibitively expensive.
If we talk about measurement it is to be effective, the price set by the price ceiling must be below the natural equilibrium price. so that they could survive.
Price ceilings
Truly speaking it prevents a price from rising above a certain level.
Truly speaking when a price ceiling is set below the equilibrium price, quantity demanded will exceed quantity supplied, and excess demand or shortages will result.
When a price floor is set above the equilibrium price, the quantity supplied will exceed the quantity demanded, and excess supply or surpluses will result.
We can say that where the government laws regulate prices instead of letting market forces determine prices, it is known as price control.

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