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corie corie
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7 years ago
Suppose the government raises the price of cheese above the market equilibrium level (P0) by imposing a high minimum price and purchasing all of the excess supply from the market, and these quantities are destroyed.  Based on the areas in the figure below, what is the change in producer surplus after this policy is adopted?


A) Producers lose area C but gain area A.
B) Producers lose area C but gain area A+B.
C) Producers gain A.
D) Producers gain area A+B+D.
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Microeconomics

Microeconomics


Edition: 8th
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7 years ago
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