Suppose the demand and supply curve for wheat in the us are

Question

Suppose the demand and supply curve for wheat in the U.S. are approximately as follows:

            Q_D = 4000 - 200P

            Q_S = 2800 + 200P

1) How much wheat did the government need to buy to support the price of $3.50 per bushel? What was the effect of government purchase on the demand curve? Show this in the graph.

2) What was consumer’s gain or loss? Producer’s gain or loss? Government purchase cost? Change in total social surplus?