If a Price Floor Is Set at $23 in the Market

question 114

Multiple Choice

If a price floor is set at $23 in the market shown in the graph, which area(s) would represent the surplus that is transferred from consumers to producers?

• A) B + C + D
• B) B + C
• C) C
• D) B

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Definitions:

Economies of Scale

The cost advantage achieved when production becomes efficient, leading to a decrease in the average costs per unit as output increases.

Technology Specialization

The focus of a company or industry on a specific technology niche, with the aim of achieving leadership and expertise in that area.

Market Segmentation

The process of dividing a market of potential customers into groups, or segments, based on different characteristics.

Bureaucratic Logistical Issues

Challenges in organizing, planning, and carrying out operations often caused by complex administrative procedures.