2) Suppose that the government imposes a price floor of $40. Illustrate the price floor on the graph and recalculate the amount of consumer surplus. Evaluate the change in producer surplus.
2) Suppose that the government imposes a price floor of $40. Illustrate the price floor on the graph and recalculate the amount of consumer surplus. Evaluate the change in producer surplus.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 3QFR
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Question
Referring to question 2: Suppose the government imposes a $40 price floor . This price floor creates a market _____ in this market if it is binding.
Group of answer choices
shortage
surplus
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