Figure 4-10 Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R₀.
-Refer to Figure 4-10. Suppose that instead of a price ceiling, the government imposed a price floor of R₁. What is the area representing the portion of consumer surplus transferred to producers as a result of the price floor?

Question

Figure 4-10 Figure 4-10 Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R<sub>0</sub>. -Refer to Figure 4-10. Suppose that instead of a price ceiling, the government imposed a price floor of R<sub>1</sub>. What is the area representing the portion of consumer surplus transferred to producers as a result of the price floor? A) A B) B C) B + C D) A + B

Figure 4-10 Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R<sub>0</sub>. -Refer to Figure 4-10. Suppose that instead of a price ceiling, the government imposed a price floor of R<sub>1</sub>. What is the area representing the portion of consumer surplus transferred to producers as a result of the price floor? A) A B) B C) B + C D) A + B

Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R₀.
-Refer to Figure 4-10. Suppose that instead of a price ceiling, the government imposed a price floor of R₁. What is the area representing the portion of consumer surplus transferred to producers as a result of the price floor?

Quizplus · Accepted Answer

A price floor set above the equilibrium price results in a higher price, reducing consumer surplus. The area B represents the portion of consumer surplus that is transferred to producers due to the higher price.

Figure 4-10 Figure 4-10 Shows the Market for Apartments