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 the portion of consumer surplus that has been transferred to producer surplus as a result 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 the portion of consumer surplus that has been transferred to producer surplus as a result of the price floor?

Quizplus · Accepted Answer

The value of the portion of consumer surplus transferred to producer surplus due to a price floor is typically calculated by the area of the rectangle formed between the original equilibrium price and the new price floor, multiplied by the quantity sold. In this case, it is $1,200.

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