5.     About 100 million pounds of jelly beans are consumed in the United States each year, and the price has been about 50 cents per pound. However, jelly bean produc- ers feel that their incomes are too low and have con- vinced the government that price supports are in order. The government will therefore buy up as many jelly beans as necessary to keep the price at $1 per pound. However, government economists are worried about the impact of this program because they have no esti- mates of the elasticities of jelly bean demand or supply.

a.    Could this program cost the government more than $50 million per year? Under what conditions? Could it cost less than $50 million per year? Under what conditions? Illustrate with a diagram.

b.    Could this program  cost  consumers  (in terms of lost consumer surplus) more than $50 million per year? Under what conditions? Could itcost consumers less than $50 million per year? Under what conditions? Again, use a diagram to illustrate.