-Refer to the diagram above.Suppose that a price floor is imposed on the market at a price of $8.The value of the loss of total economic surplus caused by the price floor is
A) $8.
B) $10.64.
C) $18.64.
D) $48.
E) $64.

Question

-Refer to the diagram above.Suppose that a price floor is imposed on the market at a price of $8.The value of the loss of total economic surplus caused by the price floor is
A) $8. 
B) $10.64. 
C) $18.64. 
D) $48. 
E) $64.

Quizplus · Accepted Answer

A price floor set above the equilibrium price leads to a surplus, reducing total economic surplus by creating deadweight loss. The value of this loss is calculated based on the difference between the quantity supplied and quantity demanded at the price floor, which is $18.64 in this scenario.

-Refer to the Diagram Above