Markets and Government: End of Chapter Problem
Consider the market shown in the graph.
Compute the consumer surplus when the market is at equilibrium.
$ ________________
Compute the producer surplus when the market is at equilibrium.
$ ___________________
Complete the following sentence.
If the government imposes a price floor of $20 for this product, consumer surplus will ( Decrease or Increase) _____________?
and producer surplus will. (Decrease or Increase)_________ ?