If the intended aim of the price floor set at $12, as shown in the graph, was a net increase in the well-being of producers, then normative analysis would conclude that the policy was:
A) effective because the surplus gained by producers through higher prices is greater than the surplus they lost through deadweight loss.
B) ineffective because the surplus gained by producers through higher prices is greater than the surplus they lost through deadweight loss.
C) effective because the surplus gained by producers through higher prices is greater than the surplus lost by consumers through higher prices.
D) There is no "right" conclusion to be reached in a normative sense, because normative analysis is not based on value judgements.
Correct Answer:
Verified
