Figure 9.3.2
-Refer to Figure 9.3.2 above. If the government establishes a price floor of $2.50 and farmers grow only the amount of berries that will be sold, producer surplus will:
A) fall by $50.
B) fall by $100.
C) remain the same.
D) rise by $50.
E) rise by $100.

Question

Figure 9.3.2
-Refer to Figure 9.3.2 above. If the government establishes a price floor of $2.50 and farmers grow only the amount of berries that will be sold, producer surplus will:
A) fall by $50. 
B) fall by $100. 
C) remain the same. 
D) rise by $50. 
E) rise by $100.

Quizplus · Accepted Answer

Producer surplus remains the same because the price floor is not binding.

Figure 9.3.2 -Refer to Figure 9.3.2 Above. If the Government Establishes a Establishes