Asked by Camilla Fernandez on Jul 27, 2024
Verified
Refer to Figure 9.4.2 above. As a result of this policy, consumer surplus will:
A) fall to $15.
B) fall to $2250.
C) rise to $2500.
D) fall to $5000.
E) rise to $5000.
Consumer Surplus
The distinction between the price consumers intend to pay for a product or service and the price they actually pay.
Government Policy
Laws, regulations, and actions taken by a government to monitor, regulate, or influence economic, social, or environmental outcomes.
Producer Surplus
The distinction between what sellers expect to earn from a good or service and the actual compensation they receive.
- Master the understanding of the concept and repercussions of price floors and price supports in agricultural markets.
Verified Answer
YS
Yeshi SeldonJul 29, 2024
Final Answer :
B
Explanation :
The policy causes the price to rise from $50 to $100, leading to a reduction in consumer surplus from $4500 to $2250.
Learning Objectives
- Master the understanding of the concept and repercussions of price floors and price supports in agricultural markets.