Figure 4-11 Figure 4-11 shows the demand and supply curves for the coffee market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at $7.00.
-Refer to Figure 4-11. What is the value of producer surplus after the imposition of the price floor?

Question

Figure 4-11  Figure 4-11 shows the demand and supply curves for the coffee market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at $7.00.
-Refer to Figure 4-11. What is the value of producer surplus after the imposition of the price floor?

Quizplus · Accepted Answer

The producer surplus is the area above the supply curve and below the price floor. In this case, the producer surplus is $4,500 - $3,000 = $1,500.

Figure 4-11 Figure 4-11 Shows the Demand and Supply