Problem
Suppose the demand and supply for wheat are described by the following equations: QD = 10 - P; QS = 2 + P , where P is the price in dollars, QD is quantity demanded in millions of bushels per year, and QS is quantity supplied in millions of bushels per year.
a. Solve for equilibrium price and quantity of wheat.
b. Would a government-set price of $5 create a surplus or a shortage of wheat? How much? Is $5 a price ceiling or a price floor?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.