Consider a perfectly competitive market for rice. Suppose the supply function i...
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Consider a perfectly competitive market for rice. Suppose the supply function is 10P and the demand function is 80-10P where P denotes the price of rice.
Government announces a Floor price = 5 and it would also purchase excess supply of rice at the floor price. Calculate the Social Welfare due to this policy.
Note: You do not need to calculate the change in Social Welfare.
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