Exhibit 31-4

-Refer to Exhibit 31-4. If producers of this good engage in rent seeking which results in the government imposing a price floor of P₂, then consumers' surplus ends up being area

Question

Exhibit 31-4 -Refer to Exhibit 31-4. If producers of this good engage in rent seeking which results in the government imposing a price floor of P₂, then consumers' surplus ends up being area

Quizplus · Accepted Answer

A price floor set above the equilibrium price reduces consumer surplus to the area below the demand curve and above the price floor, which is area A.

Exhibit 31-4 ​

Exhibit 31-4