Figure 4-8 shows the market for apartments in Springfield.Recently,the government imposed a rent ceiling of $1,000 per month.
-Refer to Figure 4-8.Suppose that instead of a rent ceiling,the government imposed a price floor of $2,000 per month for apartments.What is the value of the portion of consumer surplus transferred to producers as a result of the price floor?

Question

Quizplus · Accepted Answer

A price floor set above the equilibrium price results in a higher price for consumers, transferring some consumer surplus to producers. The value of this transfer is calculated based on the difference between the equilibrium price and the price floor, multiplied by the quantity of apartments rented.

Figure 4-8 Shows the Market for Apartments in Springfield