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Question 19N.3.HL.TZ0.1f.iii

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Date November 2019 Marks available [Maximum mark: 1] Reference code 19N.3.HL.TZ0.1f.iii
Level HL Paper 3 Time zone TZ0
Command term Determine Question number f.iii Adapted from N/A
f.iii.
[Maximum mark: 1]
19N.3.HL.TZ0.1f.iii

The market for corn on the island of Nissos is perfectly competitive. The demand and supply for corn in Nissos are given by the functions

Qd=10-0.5P

Qs=-2+P

where Qd is the quantity of corn demanded per month in millions of kilograms (kg), Qs is the quantity of corn supplied per month in millions of kg and P is the price per kg of corn in dollars ($). 

Advisors to the government of Nissos suggest setting a price floor.

The monthly corn surplus created must be purchased by the government of Nissos.

(f.iii)

Using Figure 1, determine the size of the decrease in monthly corn consumption following the imposition of the price floor.

[1]

Markscheme

1 million kg is sufficient for [1].

No workings are required.

OFR applies.

Syllabus sections