Refer to Figure 5 - 5. Suppose this market for gardening services is in a free - market equilibrium. If the government then imposes a price floor of $50 per hour for gardening services, the result would be

Refer to Figure 5 - 5. Suppose this market for gardening services is in a free - market equilibrium. If the government then imposes a price floor of $50 per hour for gardening services, the result would be

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

! pls explain for the correct option and get it done in 10-15 min I'll give multiple likes

70
Supply
60
50
40
2
30
20
10
Demand
1000 2000 3000 4000 5000 6000 7000 8000
Quantity (number of hours of gardening service per month)
FIGURE 5-5
Refer to Figure 5 - 5. Suppose this market for gardening services is in a free - market equilibrium. If the government then imposes a price floor of $50 per
hour for gardening services, the result would be
A. a loss of economic surplus of the area 1.
O B. a loss of economic surplus of the areas 6 and 7.
O C. a loss of economic surplus of the areas 2 and 6.
O D. a loss of economic surplus of the areas 2, 3, 4, 6, and 7.
O E. a loss of economic surplus of the areas 1, 2, 3, and 4.
Price ($s per hour)

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