Figure 5.5 Figure 5.5 shows the market for apartments in Springfield.Recently, the government imposed a rent ceiling of $1000 per month.
-Refer to Figure 5.5.Suppose that instead of a rent ceiling, the government imposed a price floor of $2000 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

Figure 5.5  Figure 5.5 shows the market for apartments in Springfield.Recently, the government imposed a rent ceiling of $1000 per month.
-Refer to Figure 5.5.Suppose that instead of a rent ceiling, the government imposed a price floor of $2000 per month for apartments.What is the value of the portion of consumer surplus transferred to producers as a result of the price floor?

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 can be calculated based on the difference between the equilibrium price and the price floor, multiplied by the quantity sold at the price floor.

Figure 55 Figure 5