Chapter 2R, Problem 12MCQ

To determine

The question requires us to determine the number of bushels of corn bought by consumers at the price floor set by the government.

Explanation of Solution

At the equilibrium price, the quantity demanded equals the quantity supplied means there is no shortage or surplus of the product at this point.

In the given graph, point E represents the equilibrium point for the corn in the market where:

Equilibrium price = $3 per bushel

Equilibrium quantity = 1000 units.

At a price floor of $5 per bushel,

Quantity supplied = 1200 units

Quantity demanded = 800 units.

Thus, at the price floor of $5 per bushel, consumers will purchase 800 bushels of corn.

Option “c” is correct.