The diagram to the right shows a market in which a price floor has been imposed. Identify the following (enter all values as integers). a. The deadweight loss is $ b. The transfer of consumer surplus to producers is $☐ c. Producer surplus with this price floor is $ d. Consumer surplus with this price floor is $

The diagram to the right shows a market in which a price floor has been imposed. Identify the following (enter all values as integers). a. The deadweight loss is $ b. The transfer of consumer surplus to producers is $☐ c. Producer surplus with this price floor is $ d. Consumer surplus with this price floor is $

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

The diagram to the right shows a market in which a price
floor has been imposed. Identify the following (enter all
values as integers).
a. The deadweight loss is $
b. The transfer of consumer surplus to producers is $
c. Producer surplus with this price floor is $
d. Consumer surplus with this price floor is $
Price
6.00
5.00 A
B
C
.00
D
E
3.00
F
2.00
30,000
60,000
Quantity
Supply
Pflool
Deman

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Step 1: Define Price Floor.

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Step 2: Calculate the deadweight loss:

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Step 3: Calculate the transfer of consumer surplus to producers:

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Step 4: Calculate the producer surplus with this price floor:

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Step 5: Calculate the consumer surplus with this price floor:

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