a. Imagine the corn market with regular demand curve,
a. Imagine the corn market with regular demand curve, sellers
of corn could only sell their products at $5 for some reason, , in other words, the supply curve is P=5. Draw the supply and demand curve on a graph.
b. Is the supply perfectly inelastic or elastic? Briefly explain.
c. What is consumer surplus? What is producer surplus? Mark on your graph.