With a price floor:

Name: With a price floor:
Brand: Quizplus
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Question

With a price floor:

Quizplus · Accepted Answer

When a price floor is implemented, it sets a minimum price that must be paid for the good or service. If the price floor is above the equilibrium price, it creates a surplus of supply. The producer surplus is the area above the supply curve and below the price that is received. Therefore, if the price floor increases the price that producers receive, it will increase the producer surplus if profits increase.

With a Price Floor