Figure 7-2

-Refer to Figure 7-2. If the government imposes a price floor of $110 in this market, then consumer surplus will decrease by
A)$2400.
B)$600.
C)$1800.
D)$1200.

Question

Figure 7-2
 
-Refer to Figure 7-2. If the government imposes a price floor of $110 in this market, then consumer surplus will decrease by
A)$2400. 
B)$600. 
C)$1800. 
D)$1200.

Quizplus · Accepted Answer

A price floor set above the equilibrium price reduces consumer surplus by the area of the triangle between the equilibrium price and the price floor, which is $1800 in this case.

Figure 7-2 -Refer to Figure 7-2. If the Government Imposes a Price