The traditional diet of the citizens of the nation of Ironia includes a lot of red meat, and ranchers make up a vital part of Ironia's economy. The government of Ironia decides to support its ranchers through a price floor, which it will maintain by buying up excess meat supplies. The table below shows the supply and demand schedule for red meat; quantities are given in thousands of pounds.
|
Price ($)
|
Quantity demanded (thousands of pounds)
|
Quantity supplied (thousands of pounds)
|
|
6
|
5
|
80
|
|
5
|
20
|
70
|
|
4
|
35
|
60
|
|
3
|
50
|
50
|
|
2
|
65
|
40
|
|
1
|
80
|
30
|
Instructions:Round your answers to the nearest whole number.
a. How many thousands of pounds of meat would you recommend that the government purchase to keep the price at $4 per pound?
thousand pounds.
b. How much money should the government budget for this program?