An increase in producer surplus would most likely occur if:
A)an effective price floor was imposed.
B)an effective price ceiling was imposed.
C)the market price of the good decreased.
D)no changes occurred in the market.

Question

Quizplus · Accepted Answer

An effective price floor, set above the equilibrium price, would lead to an increase in producer surplus because producers would be able to sell their goods at a higher price than what the market would normally allow. This results in higher revenues for producers.

An Increase in Producer Surplus Would Most Likely Occur If