Suppose That a Minimum Price (Price Floor) Is Legislated

question 142

Multiple Choice

Suppose that a minimum price (price floor) is legislated. To calculate producer surplus:

• A) integrate the area below the price floor and above the supply curve between zero and the free-market equilibrium price.
• B) integrate the area below the price floor and above the supply curve between zero and the quantity resulting from the price floor.
• C) integrate the area under the demand curve and above the price floor between zero quantity and the quantity resulting from the price floor.
• D) integrate the area under the demand curve and above the supply curve between zero quantity and the quantity resulting from the price floor.