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.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter5: Elasticity
Section: Chapter Questions
Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...
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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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