Figure below shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month. Price (dollars per month) $2,500 Supply 2,000 1,500 1,000 500 0 200 400 600 Demand Quantity (apartments) · What is the value of consumer surplus after the imposition of the ceiling? What is the value of producer surplus after the imposition of the ceiling? • What is the value of the deadweight loss after the imposition of the ceiling? Suppose that instead of a rent ceiling, the government imposes a price floor of $2,000 per month for apartments. • · What is the value of consumer surplus after the imposition of the price floor? What is the value of producer surplus after the imposition of the price floor? What is the value of the deadweight loss after the imposition of the price floor?

Figure below shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month. Price (dollars per month) $2,500 Supply 2,000 1,500 1,000 500 0 200 400 600 Demand Quantity (apartments) · What is the value of consumer surplus after the imposition of the ceiling? What is the value of producer surplus after the imposition of the ceiling? • What is the value of the deadweight loss after the imposition of the ceiling? Suppose that instead of a rent ceiling, the government imposes a price floor of $2,000 per month for apartments. • · What is the value of consumer surplus after the imposition of the price floor? What is the value of producer surplus after the imposition of the price floor? What is the value of the deadweight loss after the imposition of the price floor?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 32RQ: What is producer surplus? How is it illustrated on a demand and supply diagram?

See similar textbooks