Using specific numbers from the graph, explain what would happen in
this market if a new minimum price of $15 was instituted by the United
States Government. Be sure to include information identifying if this is a
ceiling or a floor, and the exact amount of shortage or surplus that would
result. (5 points) Given this shortage or surplus, explain why the
government would still choose to implement this policy (2 points), and
explain if you would support such a change. Give at least 2 reasons you
would or would not. (3 points)
If a new minimum price of $15 was instituted by the United States Government in this market, it would be considered a price floor. According to the graph, with a price floor of $15, the quantity demanded would be 80 units, but the quantity supplied would be 40 units. This would result in a surplus of 40 units.
The government may still choose to implement this policy despite the surplus because it could be aimed at protecting producers in the market. By setting a minimum price, the government can ensure that producers earn a certain level of income and are not driven out of the market due to low prices. Additionally, the government may want to maintain the stability of the market by preventing prices from dropping too low.
I would not support such a change for several reasons. Firstly, a surplus of 40 units would lead to wasted resources and potentially harm the environment if excess goods are not properly disposed of. Secondly, a price floor could lead to higher prices for consumers, reducing their purchasing power and potentially causing inefficiencies in the market.
Overall, while the government may have good intentions in implementing a price floor, I believe that in this particular scenario, the negative consequences outweigh the benefits.
make it sound like a 11th grader wrote it and less AI sounding
If the United States Government set a minimum price of $15 in this market, it would be like putting a floor under the price. With the new price floor, the quantity demanded would be 80 units, but only 40 units would be supplied, creating a surplus of 40 units.
Even though there would be a surplus, the government might still want to introduce this policy to protect producers in the market. By guaranteeing a minimum price, the government can make sure that producers can earn a decent income and stay in the market. Additionally, the government might want to keep market prices stable and prevent them from dropping too low.
I wouldn't really support this change because a surplus of 40 units could lead to wastage and harm the environment if the excess goods are not properly handled. Also, setting a minimum price could end up increasing prices for consumers, reducing their ability to buy and creating inefficiencies in the market.
In conclusion, although the government's intentions might be good, I believe that in this case, the negative effects of a price floor would outweigh the benefits.