Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. economics
  3. us corn production is used primarily to feed cattl

US corn production is used primarily to feed cattle and hogs to produce meat for human...

60.1K

Verified Solution

Question

Economics

US corn production is used primarily to feed cattle and hogs toproduce meat for human consumption and to produce biofuels. Supposethe demand for corn as livestock feed is given by: Qfeed=24.5-4P,where quantities are in billions of bushels and the price, P, isin dollars. The US government mandates that a fixed percentage ofUS gasoline be blended with ethanol-based biofuel.

Assume this mandate fixes the total quantity of corn used fordomestic fuel production at 10.5 m. bushels per year. Assume theU.S. supply of corn is given as Qs=3P

Suppose the government decides to eliminate the biofuelsmandate. The demand for corn by ethanol producers is given as,Qfuel=12-10P (in the absence of any mandate).
(c) Derive the producer surplus in the US corn market with andwithout the mandate. Are producers better or worse off under thebiofuels mandate?
(d) In your opinion, is the biofuels mandate a regressive orprogressive policy? Explain your answer.

Answer & Explanation Solved by verified expert
3.6 Ratings (591 Votes)
c Q s 3PUnder mandate Q d 105 245 4P 35 4PQs Qd P 5 Q 15Producer surplus P Q 12 P Q 375Without mandatethe demand of corn as livestock feed is much higher than thedemand of corn for biofuels Hence only    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Imagine that you are part of a research team that specializes in diagnosing disorders associated with...

Medical Sciences
Q

For the two state paramagnet, explain why the magnetization M approaches zero at high temperatures.

Physics
Q

What is the first step in the process of writing a summary O Read and...

Biology
Q

An electric winch lifts a weight on the end of a 5 m jib pole...

Basic Math
Q

Order the following numbers from least to greatest 3 49 5 45 15 9 O...

Algebra
Q

Starr Company decides to establish a fund that it will use...

Accounting
Q

Emerson and Dakota formed a partnership dividing income as follows: Annual salary allowance to Emerson...

Accounting
Q

Please answer. Headland Company commonly issues long-term notes payable to its various lenders. Headland...

Accounting
Q

if I can get help and explain how to find these answers ...

Accounting
Q

Stormy Corporation has two service departments (S1 and S2) and two production departments (P1 and...

Accounting
Q

Create excel document with this problems. Premium Manufacturing Company is evaluating two forklift systems...

Accounting
Q

Prepare a balance sheet Carmen Camry operates a consulting firm called Help...

Accounting